If All Fixed Taxes in the United States Were Removed

question 189

Multiple Choice

If all fixed taxes in the United States were removed and only variable taxes remained, what would be the effect on the expenditures schedule?

• A)The expenditure schedule will shift upward.
• B)The expenditure schedule will shift downward.
• C)The expenditure schedule will become flatter.
• D)The expenditure schedule will become steeper.

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Definitions:

Primarily Liable

Being directly responsible for a debt or obligation, without secondary parties to share the liability.

Secondarily Liable

Someone who is secondarily liable holds responsibility to fulfill an obligation if the primary party fails to do so, commonly seen in guarantor or co-signer financial arrangements.

Payable

Refers to money that is owed by a person or company and must be paid to another party.

Obligation

A legal or moral duty to do or not do something, often with legal implications if not fulfilled.