Which of the Following Would Transfer Wealth from the Young

question 49

Multiple Choice

Which of the following would transfer wealth from the young to the old?

• A) Taxes are raised to provide better education.
• B) Taxes are raised to improve government infrastructure such as roads and bridges.
• C) Taxes are raised to provide more generous pensions.
• D) Taxes are raised to pay back part of the government debt.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on the income or profit level.

Unlevered Cost

The cost of funding a project or investment without any associated debt, reflecting the cost of capital that is equity financed.

Pre-Tax Cost

The price of a good or service before any taxes are applied.

Cost of Equity

The return that shareholders require for investing in a company’s equity.