A ________ Tax Policy Is One That Has No Impact

question 10

Multiple Choice

A ________ tax policy is one that has no impact on private decision-making, while a ________ policy is designed to encourage specific behavior.

• A) flat; tax incentive
• B) neutral; flat tax
• C) neutral; tax incentive
• D) none of the above

Grasp the legal capacities required to enter into a contract.

Understand the Uniform Commercial Code's role in contracts for the sale of goods.

Describe the Restatement of Contracts and its significance.

Distinguish between express, implied, and quasi-contracts.

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Definitions:

Retained Earnings

The portion of net earnings not paid out as dividends but reinvested in the business or kept as reserve.

Cost of Equity

The return a company theoretically pays to its equity investors, i.e., shareholders, to compensate them for the risk of investing in the stock.

Marginal Cost of Capital

The cost of obtaining an additional dollar of new capital, which increases as more capital is raised due to increasing risk and/or decreasing attractiveness to investors.

Investment Opportunity Schedule

A graph or listing that shows the relationship between the rates of return on investment and the amount of investment.