All of the Following Statements Are True Except

question 173

Multiple Choice

All of the following statements are true except

• A) an income tax taxes savings twice only if consumption is the measure used to gauge a person's ability to pay.
• B) proponents of income as a tax base argue that you should be taxed on what you draw out of the common pot instead of on the basis of your ability to draw from the pot.
• C) the double taxation of saving tends to reduce the saving rate.
• D) at this time, there is not clear consensus on what the best tax base is.

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Definitions:

Extensive Form

A representation of a game in decision tree format, showing the sequence of moves, possible strategies, and outcomes.

Credible Threat

In a sequential game with two players, a statement made by Player 1 that truthfully (credibly) threatens a penalizing action against Player 2 if Player 2 does something that Player 1 does not want Player 2 to do. Opposite of empty threat.

Coercion

Coercion refers to the practice of persuading someone to do something by using force or threats.

Empty Threat

A declared intention to perform an action that is not actually intended to be carried out, often used as a strategic bluff.