Economists Use the Term Tax Incidence to Refer to the Proportion

question 65

True/False

Economists use the term tax incidence to refer to the proportion of tax paid by sellers relative to buyers.

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Definitions:

Interest-Rate Change

A fluctuation in the cost of borrowing or the return on savings, which can significantly impact financial markets and economic conditions.

Term to Maturity

The duration of time until the final repayment date of a loan, bond, or other financial instrument.

Coupon Rate

The coupon rate is the interest rate that the issuer of a bond or other fixed-income security promises to pay to the holder annually, expressed as a percentage of the par value.

Interest-Rate Risk

Interest-Rate Risk refers to the risk of investment value changing due to fluctuations in the absolute level of interest rates, which can negatively affect fixed-income securities.