If the Government Decided That Each Family Needs a Minimum

question 218

Multiple Choice

If the government decided that each family needs a minimum income of $25,000 and promised to make up the difference between whatever a family earned and $25,000, which of the following is correct?

• A)The government is effectively taxing every dollar earned up to $25,000 at a rate of 100%.
• B)This program would reduce the incentive to work to earn any wage up to $25,000.
• C)If workers are discouraged from working due to this program, they will miss any on-the-job training that would have otherwise occurred, limiting their ability to improve their skills.
• D)All of the above are correct.

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Definitions:

Service Potential

This refers to the capacity or ability of a service or asset to provide benefits or usefulness to an entity or its operations.

Land

An economic resource representing natural resources or ground, classified as a fixed asset in accounting, not subject to depreciation.

Declining-Balance Depreciation

A method of accelerated depreciation where an asset loses value by a constant percentage each year over its useful life.

Remodeling Costs

Expenses associated with making improvements or alterations to a building or structure to enhance its value or functionality.