If Parliament Adjusted Our Tax System So That the Rate

question 38

Multiple Choice

If Parliament adjusted our tax system so that the rate of taxation increased,the:

• A)economy would become more inflation-prone
• B)economy would tend to become less stable
• C)stability of the economy would be unaffected
• D)economy would tend to become more stable
• E)the distribution of income would become more unequal

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Definitions:

Risky Portfolio

A collection of investments that hold a significant level of risk, aiming for potentially higher returns.

Expected Rate of Return

The anticipated return on an investment, based on the probability of various outcomes, including both risky and risk-free returns.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, often used in finance to gauge investment risk.

Risky Asset

An investment that holds a significant chance of losing some or all of its value, offering the potential for higher returns to compensate for higher risk.