A Safe and Easy Way for a Taxpayer to Avoid

question 59

True/False

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

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Definitions:

Gentlemen's Agreements

Informal, non-binding agreements between parties based on honor and not legally enforceable.

Formal Cartels

An agreement among competing firms to control prices, production, and market distribution, which is often illegal.

Cartel

An association of manufacturers or suppliers that maintains prices at a high level by restricting competition and output.

Elasticity of Demand

A measure of how responsive the quantity demanded of a good or service is to a change in its price, indicating how changes in price influence consumer purchasing behavior.