Which of the Following Statements About a Value Added Tax

question 27

Multiple Choice

Which of the following statements about a value added tax (VAT) is false?

• A) Many countries use a VAT.
• B) The U.S. has imposed a VAT since 1913.
• C) A VAT has been proposed in the U.S. to replace part of the income tax.
• D) A VAT operates similarly to a sales tax.

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Definitions:

Federal Government

The central government of a federation, possessing the power to manage matters impacting the whole nation.

Economic Role

The function that individuals, institutions, or items play in the economic system, influencing how resources are distributed and utilized.

Trust Fund

A legal entity established to hold assets on behalf of individuals or organizations, often used for wealth management or to set aside money for specific purposes.

Social Security

A government program that provides financial assistance to people with an inadequate or no income, particularly the elderly, disabled, and families with dependent children.