Which of the Following Is True

question 172

Multiple Choice

Which of the following is true?
i.If demand is perfectly elastic,the tax creates no deadweight loss.
ii.The more elastic the supply of a factor of production,the greater is the deadweight loss from an income tax.
iii.A tax is regressive if the average tax rate rises with income.

• A) only i
• B) only ii
• C) only iii
• D) ii and iii
• E) i and ii

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Definitions:

Administrative Fee

Charges imposed by investment funds or companies to cover operational and management expenses.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity of the business.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Revolving Credit Agreement

A banking agreement that allows the borrower to withdraw, repay, and redraw loans advanced to them up to a specified amount.