Which of the Following Is True of Contracts

question 72

Multiple Choice

Which of the following is true of contracts?

• A) Contracts create an obligation between the parties.
• B) They are not enforceable in the court of law.
• C) Businesses enter into contracts rarely.
• D) Contracts are easy to break.
• E) Business sales contracts are implied or spoken and not written.

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Definitions:

Value-Added Tax (VAT)

A tax on the amount by which the value of an article has been increased at each stage of its production or distribution.

Income Tax

A government levy on individuals' or corporations' earnings.

Marginal Tax Rate

The rate of tax applied to the last dollar of income, indicating how much of any additional income will be taken as tax.

Lump-Sum Tax

A tax that is a set amount, no matter the taxpayer's income level or economic activity.