Which of the Following Statements About Tax Policy Objectives Regarding

question 28

Multiple Choice

Which of the following statements about tax policy objectives regarding business expenses is false?

• A) Lobbying expenses are not deductible because Congress does not want to subsidize political activities.
• B) By disallowing a tax deduction, Congress increases the after-tax cost of undesirable expenditures.
• C) The tax treatment of meals and entertainment expenses is intended to make the law more equitable.
• D) The business interest expense limitation increases the disparity between the tax treatment of debt and equity financing.

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Definitions:

Performance Test

An assessment method that requires individuals to execute specific tasks or activities rather than answer questions, measuring skills and abilities through actual performance.

Culture-Fair Test

A type of psychological test designed to be free of cultural bias, so that it accurately measures intelligence or other attributes across different cultures and ethnic groups.

Criterion-Related Validity

Refers to the extent to which a measure is related to an outcome.

Content Validity

The extent to which a test measures all aspects of the concept it intends to measure.