Which of the Following Is an Example of a Tax

question 68

Multiple Choice

Which of the following is an example of a tax credit?

• A)mortgage interest
• B)amounts withheld for social insurance
• C)individual retirement account contributions
• D)caregiver and medical expenses
• E)net business income

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Definitions:

Diminishing Returns

The principle stating that if one factor of production is increased while others remain constant, the overall returns will incrementally decrease after a certain point, leading to reduced efficiency.

Decreasing Returns to Scale

A situation in which a proportional increase in all inputs results in a less-than-proportional increase in output.

Cobb-Douglas Production Function

The Cobb-Douglas Production Function is an economic model representing the relationship of an output to inputs, typically showing how labor and capital contribute to the production process in a way that reflects diminishing returns.

Returns to Scale

The rate at which output increases as inputs are increased proportionally in the production process.