Which of the Following Statement Is/are Included in Adam Smith's

question 30

Multiple Choice

Which of the following statement is/are included in Adam Smith's four requirements for a good tax system?
I.Changes in the tax law should be made as needed to raise revenue and for proper administration.
II.A tax should be imposed in proportion to a taxpayer's ability to pay.
III.A taxpayer should be required to pay a tax when it is most likely to be convenient for the taxpayer to make the payment.
IV.The government must collect taxes equal to it's expenses.

• A)Statements I and II are correct.
• B)Statements I and IV are correct.
• C)Statements II and III are correct.
• D)Statements II and IV are correct.
• E)Statements III and IV are correct.

---

Definitions:

Amortized

Refers to the process of paying off debt over time in equal installments of principal and interest.

Compounded Monthly

A method of interest calculation where the interest earned each month is added to the principal, thus earning more interest in the following month.

Compounded Monthly

The process of calculating interest on the initial principal and the accumulated interest from previous periods monthly.

Amortized

The steady decrease of an owed sum through consistent payments towards both the interest and the principal over a set duration.