Mona Is Induced by Her Guardian Newt to Sign a Contract

question 63

Multiple Choice

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt's investment firm.Unknown to Mona,Newt realizes ongoing commissions from the investment.Most likely,Mona may

• A)not rescind the contract.
• B)rescind the contract on the basis of undue influence.
• C)rescind the contract on the basis of mistake.
• D)rescind the contract on the basis of fraud.

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Definitions:

Average Tax Rate

The fraction of total income that is paid as taxes, calculated by dividing the total amount of taxes paid by the taxpayer's total income.

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income, indicating the percentage of any additional earnings that will be paid in taxes.

Progressive Tax

A tax system in which the tax rate increases as the taxable amount goes up, making higher earners pay a larger percentage of their income than lower earners.

Government Borrowing

The process by which a government finances its expenditure by borrowing money, typically through issuing bonds.