When Do You Know an Economist Has Crossed the Line

question 25

Multiple Choice

When do you know an economist has crossed the line from scientist to policy adviser?

• A) when he explains just the facts
• B) when he makes positive statements
• C) when he makes normative statements
• D) when he cannot reach a conclusion

---

Definitions:

Deferred Tax Liability

A tax obligation that arises when taxable income and accounting income differ, to be paid in future periods when those differences reverse.

Effective Income Tax Rate

The average rate at which an individual's or corporation's pre-tax income is taxed, calculated by dividing the total tax expense by the taxable income.

Deferred Tax Liability

A tax obligation that a company owes but does not have to pay until a future date, often due to temporary differences between accounting and tax rules.