Gamma Co Has Discovered That One of Its Products Is

question 40

Multiple Choice

Gamma Co has discovered that one of its products is potentially dangerous.That danger,however,is not great.There is only a small chance that someone will be hurt,and even if someone is hurt,the injury will not be life threatening.Gamma Co therefore has decided to do nothing about the danger.It has employed a form of risk management known as

• A)risk ignorance.
• B)risk aversion.
• C)risk displacement.
• D)risk harmonization.
• E)risk acceptance.

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Definitions:

Progressive Tax

A tax system where the tax rate increases as the taxable income increases, typically designed to tax higher-income individuals more heavily.

Proportional Tax

A tax system where the tax rate is fixed and applied equally to all taxpayers, irrespective of income level.

Tax Liability

The total amount of tax that an individual or entity is legally obligated to pay to a taxing authority.

Tax Incidence

The manner in which the burden of a tax is shared among participants in a market.