If a Poor Family Has Three Children in Public School

question 86

Multiple Choice

If a poor family has three children in public school and a rich family has two children in private school, the ability-to-pay principle would suggest that

• A)the poor family should pay more in taxes to pay for public education than the rich family.
• B)the rich family should pay more in taxes to pay for public education than the poor family.
• C)the benefits of private school exceed those of public school.
• D)public schools should be financed by property taxes.

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Definitions:

Guaranteed Residual Value

The estimated value that a leased asset will have at the end of the lease term, as guaranteed by the lessee or a third party.

Implicit Lease Rate

The interest rate embedded in a lease contract, used to calculate lease payments.

Off-Balance Sheet Leases

Leasing arrangements that do not appear on a company's balance sheet as an asset or liability, often used to keep the debt-to-equity ratio low.

Income Statement

A report that outlines a company's financial results, including income, expenses, and profits, during a particular period of accounting.