Which of the Following Best Explains Why High Marginal Tax

question 30

Multiple Choice

Which of the following best explains why high marginal tax rates retard output?

• A) High marginal tax rates reduce the incentive to earn, invest, and use resources efficiently.
• B) High marginal tax rates will encourage foreign investment.
• C) High marginal tax rates will reduce budget deficits and lower interest rates.
• D) High marginal tax rates encourage people to substitute more-desired nondeductible goods for less-desired tax-deductible goods.

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Definitions:

Time-Driven

A method of costing or scheduling that is based on the amount of time required to complete tasks.

Activity-Based Costing

A methodology that assigns costs to products and services based on the resources they consume.

Order Fulfillment

The complete process from receiving an order to delivering the product to the customer, including inventory management, packaging, and shipping.

Time-Driven

A methodology or concept where actions or processes are initiated and completed based on specific timelines.