The Ability-To-Pay Principle Is Most Closely Tied to the Concept

question 106

Multiple Choice

The ability-to-pay principle is most closely tied to the concept of

• A)horizontal equity in taxation.
• B)fiscal federalism.
• C)vertical equity in taxation.
• D)the benefits principle of tax equity.

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Definitions:

Quantity Demanded

The specific amount of a good or service consumers are willing to buy at a given price, holding other factors constant.

Elasticity Coefficient

A measure that quantifies the responsiveness of the quantity demanded or supplied of a good to a change in one of its determinants, such as price.

Relative Change

The measure of change in a variable relative to its initial value, often expressed as a percentage.

Inelastic

Describes a situation where the quantity demanded or supplied of a good or service changes by a relatively small amount in response to changes in its price.