Which of the Following Is an Advantage of a Consumption

question 8

Multiple Choice

Which of the following is an advantage of a consumption tax relative to the current tax system?

• A) A consumption tax is more complex.
• B) A consumption tax would increase vertical equity.
• C) A consumption tax would increase horizontal equity.
• D) A consumption tax reduces savings incentives

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Definitions:

Central Tendency

A statistical measure that identifies a single value as representative of the middle of a dataset, commonly the mean, median, or mode.

Outliers

Data points that lie an abnormal distance from other values in a random sample from a population, often indicating a measurement or transcription error, or a novel phenomenon.

Variance

Measures the variability or spread of a set of data points around their mean; it's calculated as the average of the squared differences from the Mean.

Descriptive Statistics

Statistical methods that summarize and organize the information in a data set to describe its various features, such as mean or standard deviation, without drawing inferences about the population.