The Introduction of Personal Taxes May Reveal a Disadvantage to the Use

question 18

Multiple Choice

The introduction of personal taxes may reveal a disadvantage to the use of debt if the:

• A)personal tax rate on the distribution of income to shareholders is less than the personal tax rate on interest income.
• B)personal tax rate on the distribution of income to shareholders is greater than the personal tax rate on interest income.
• C)personal tax rate on the distribution of income to shareholders is equal to the personal tax rate on interest income.
• D)personal tax rate on interest income is zero.
• E)None of the above.

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Definitions:

DVD Players

Electronic devices designed for the playback of DVDs, allowing the viewing of movies and other digital content stored on DVD format.

Economic Profits

The variance between total income and the aggregate of explicit and implicit costs for a business.

General Equilibrium

A state in an economy where all markets are in equilibrium simultaneously, and the decisions of consumers and producers are perfectly coordinated.

Pareto Efficiency

An economic state where resources are allocated in a way that it is impossible to make one individual better off without making another individual worse off.