Which of the Following Statements About a Consumption Tax Is

question 70

Multiple Choice

Which of the following statements about a consumption tax is false?

• A)Compared to an income tax, a consumption tax would necessarily produce lower revenues for the government in a given year because the portion of income saved is not taxed.
• B)A consumption tax encourages saving, which when invested could lead to increased economic activity.
• C)Under a consumption tax, current consumption is taxed at a lower rate than future consumption.
• D)A consumption tax could favour high-income individuals who are likely to save more than low-income individuals.

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Definitions:

Transnational Company

A multinational corporation that operates in multiple countries but adjusts its practices and products to local conditions.

Functional Structure

An organizational design that groups employees according to their specialized roles or functions within the company, aiming for operational efficiency.

Horizontal Flow

The movement of goods, information, or services across similar levels of an organization or among departments without a hierarchical order.

Expertise

A high level of knowledge or skill in a particular area or field.