Part of the Surplus Lost to Market Participants When a Tax

question 133

Multiple Choice

Part of the surplus lost to market participants when a tax is imposed is:

• A)transferred to the government in revenues.
• B)transferred to others who are affected.
• C)redistributed from seller to buyer.
• D)None of these statements is true.

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Definitions:

Net Capital Spending

Net capital spending is the total expenditure on fixed assets minus any sales of fixed assets, indicating a company's investment in its physical assets.

Comprehensive Income

Represents the total change in equity for a business entity not resulting from transactions with owners, including all revenues, gains, expenses, and losses.

Net Fixed Assets

The value of a company’s property, plant, and equipment minus any accumulated depreciation, indicating the tangible assets' net book value.

Liquid Asset

Assets that can be quickly and easily converted into cash without significant loss of value, including cash itself, marketable securities, and accounts receivable.