The Sharp Reduction in Marginal Tax Rates During the 1980s

question 55

Multiple Choice

The sharp reduction in marginal tax rates during the 1980s

• A) reduced the incentive of high-income Americans to work.
• B) increased the incentive of high-income Americans to utilize tax shelters.
• C) increased the unemployment rate of high-income Americans.
• D) increased the visible income of high-income Americans.

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Definitions:

Activity-Based Costing System

A costing methodology that assigns manufacturing overhead costs to products based on the activities and resources that go into producing them.

Unit Product Costs

The cost assigned to each unit of product, which includes direct materials, direct labor, and allocated manufacturing overhead.

Facility-Level Costs

These are the costs that are necessary to operate a facility, such as a manufacturing plant or a warehouse, and do not vary significantly with production volume.

Overhead Cost

Expenses related to the ongoing operational costs of running a business that are not directly tied to the production of goods or services.