Efficiency Is Related to the Size of the Economic Pie

question 40

True/False

Efficiency is related to the size of the economic pie, whereas equality is related to how the pie gets sliced and distributed.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), expressing the percentage of income that goes to taxes.

Depreciable Equipment

Tangible assets used in operations that lose value over time due to wear and tear, which can be written off as an expense for tax purposes over its useful life.

Net Income

The ultimate profit a company makes, determined by taking away all expenses, taxes, and costs from the total income generated.

Cash Outflow

The total amount of money being transferred out of a business, including expenses, investments, and other payments.