The Basic Model of Taxation and Risk Taking Was Developed

question 30

Multiple Choice

The basic model of taxation and risk taking was developed by Domar and Musgrave in 1944; it reached the conclusion that:

• A) it is not fair to tax the returns from risky assets.
• B) taxing the returns from risky assets has no impact on risk taking.
• C) taxing the returns from risky assets will actually increase risk taking.
• D) taxing the returns from risky assets will discourage risk taking.