Identify Which of the Following Statements Is True

question 62

Multiple Choice

Identify which of the following statements is true.

• A) Under the unified transfer tax system, taxable gifts made after 1976 are included in the donor's death tax base.
• B) The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.
• C) The gift tax is not a part of the unified transfer tax system.
• D) All of the above are false.

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Definitions:

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in consumers' income.

Inferior Good

A type of good for which demand decreases when the income of the consumer increases, inversely related to consumer income.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, in contrast to a normal good.

Inferior Goods

A good that has a negative income elasticity, so that as consumer income rises, the demand for the good falls.