Irving Fisher Argued for a Tax on Consumption Instead of on Income

question 30

Multiple Choice

Irving Fisher argued for a tax on consumption instead of on income because

• A) the standard of living depends not on income, but on how much is consumed.
• B) consumption is the best indication of ability to pay.
• C) a tax on income discourages saving by taxing savings twice.
• D) a tax on consumption raises more revenue than a tax on income.

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility, and less than 1 indicates lower volatility.

Standard Deviation

A measure of the dispersion or variation in a distribution or set of data, indicating how much individual values differ from the mean.

Coefficient of Variation

A statistical measure of the dispersion of data points in a data series around the mean, expressed as a percentage.

Expected Returns

The anticipated amount of profit or loss an investment is projected to generate.