An Advantage of a Consumption Tax Is That It Does

question 158

True/False

An advantage of a consumption tax is that it does not distort the incentive to save.

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Definitions:

Variable Cost

A cost that varies with the level of output or production volume, such as materials and labor.

Transfer Price

The price at which goods or services are sold between divisions within the same company or between affiliated companies.

Minimum Return

The least amount of profit or yield expected from an investment, project, or venture to consider it desirable or viable.

Invested Assets

Resources that are obtained with the goal of producing income or profit.