A Tax Haven

question 38

Multiple Choice

A tax haven:

• A)allows an entity to reduce the taxes paid to the home government and those paid to foreign governments.
• B)directs both the host-country government and the parent company's home government not to tax the income of a foreign subsidiary.
• C)specifies that parent companies are not taxed on foreign source income until they actually receive a dividend.
• D)is a country with an exceptionally low,or even no,income tax.

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning their consumption by one individual does not reduce availability to others.

Private Consumption

The total value of all goods and services consumed by individuals and households for personal use.

Pareto Efficient

A resource distribution condition where no reallocation can improve one person's situation without detrimentally affecting another person's situation.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use does not reduce its availability to others.