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.

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Definitions:

Pituitary Gland

A pea-sized gland situated at the base of the brain, responsible for controlling and regulating various bodily functions through the secretion of hormones.

Hypothalamus

A part of the brain situated under the thalamus, tasked with overseeing the autonomic nervous system and managing the pituitary gland to maintain various bodily functions such as temperature control, thirst, hunger, and other mechanisms that keep the body in a state of balance.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brain to the lower back, transmitting neural signals between the brain and the body.

Nervous System

The complex network of nerves and cells that transmit signals between different parts of the body, facilitating bodily functions and sensations.