The Following Questions Refer to the Information Given Below

question 31

Multiple Choice

The Following Questions Refer to the information given below.
Suppose the government implements a negative income tax plan to deal with the poverty problem.The negative income tax rate is set at 50%,and the break-even level of income is set at $5,000.
-If the negative income tax rate were reduced from 50% to 40% while the guaranteed income level is held constant,the cost of the plan would

• A)Increase
• B)Decrease by more than 10%
• C)Decrease by 10%
• D)Not change
• E)Not be able to be determined

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Definitions:

Venture Capital

Financing that investors provide to startup companies and small businesses with long-term growth potential.

Accredited Investors

Investors who earn an annual income of more than $200,000 or have a net worth of more than $1 million.

Financial Performance

A measure of how well a company can use assets from its primary mode of business and generate revenues.

Market Rates

The prevailing price or cost of goods, services, or commodities as determined by the marketplace.