A CBO Study Estimated That the Excess Burden from the Corporate

question 26

Multiple Choice

A CBO study estimated that the excess burden from the corporate income tax ________ of the revenues raised by the tax.This estimate would make the corporate income tax ________ imposed by the federal government.

• A)could equal more than half; one of the most inefficient taxes
• B)equals less than 10 percent; one of the most efficient taxes
• C)equals less than 3 percent; the most efficient tax
• D)equals more than 90 percent; the most inefficient tax

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Definitions:

Futures Position

An investment strategy involving contracts for the purchase or sale of assets at a future date at a price specified today.

Closed Out

The process of finalizing all positions in a security or contract, effectively ending all obligations or engagements in those positions.

Hedge

An investment position intended to offset potential losses or gains that may be incurred by a companion investment, a common risk management strategy.

Speculator

An investor who engages in the buying and selling of financial instruments with the aim of profiting from short-term market fluctuations.