A Rationale for the Installment Method Tax Rule Is

question 52

Multiple Choice

A rationale for the installment method tax rule is:

• A) Ability to pay.
• B) Equity and fairness.
• C) Simplicity.
• D) Revenue neutrality.

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Definitions:

Unit Elastic

A situation where a percentage change in the price of a good results in an equal percentage change in the quantity demanded.

Inelastic

Describes a situation where the demand or supply for a good or service is not significantly altered when the price changes.

Elastic

Elastic describes a situation in economics where the quantity demanded or supplied changes significantly in response to price changes.

Price Elasticity

The extent to which changes in price affect the demand for a specific good.