Which of the Following Statements About Marginal Tax Rates Is

question 44

Multiple Choice

Which of the following statements about marginal tax rates is false?

• A)A taxpayer's marginal rate does not change over time.
• B)As the marginal rate decreases, the after-tax cost of a deductible expense increases.
• C)As the marginal rate decreases, the after-tax value of an income-generating transaction increases.
• D)Statements A.and B.are false.

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Definitions:

Little Return

A situation where an investment yields a minimal profit, often below the expectations of the investor.

Low Level of Cash

This term indicates a situation where a business or individual has minimal amounts of liquid assets or money on hand.

Precautionary Demand

The desire to hold cash or liquid assets to guard against unexpected events.

Payments to Vendors

Money transfers made by a business to its suppliers for goods or services received.