Which of the Following Statements Is Correct

question 135

Multiple Choice

Which of the following statements is correct?

• A) Automotive manufacturers prefer stricter fuel economy regulations to higher gasoline taxes.
• B) Higher gasoline taxes have provided a market-based incentive for Europeans to buy more fuel-efficient vehicles.
• C) Higher gasoline taxes have had no effect on the U.S. demand for gasoline because the demand for gasoline is perfectly inelastic.
• D) Fuel efficiency regulations are more effective than gasoline taxes in reducing the demand for gasoline in the United States and Europe.

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Definitions:

Dividends

Dividends are payments made by a corporation to its shareholders, usually derived from the company's profits, as a way to distribute a portion of the earnings back to investors.

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income, often seen in international business or when corporate income is taxed both at the corporate and personal levels.

Preferred Stock

Preferred stock is a type of stock that provides dividends before any dividends are paid to common stockholders and typically does not confer voting rights, offering a blend of stock and bond features.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.