What Was the Ultimate Result of President Reagan's Two Substantial

question 47

Multiple Choice

What was the ultimate result of President Reagan's two substantial tax cuts?

• A) They benefited the wealthy.
• B) They had little effect on the economy.
• C) They had essentially no effect on the economy.
• D) They made a significant difference to the average taxpayer.

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Definitions:

Net Operating Income

The financial gain a company receives from its essential business operations, prior to the removal of interest and tax costs.

Variable Costing

Variable costing is an accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of a product.

Net Operating Income

The total profit of a company after all operating expenses are subtracted from total revenues but before deducting taxes and interest.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of a product.