According to the Lock-In Effect,individuals May

question 18

Multiple Choice

According to the lock-in effect,individuals may:

• A) sell capital assets too quickly in order to avoid the risk that policy makers will increase the capital gains tax rate.
• B) delay selling capital assets to minimize the present discounted value of capital gains tax payments.
• C) sell capital assets just before they die so their heirs will not be forced to pay tax on the gains.
• D) leave cash to their children rather than capital assets in order to minimize the tax complications.

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Definitions:

Energy-Wasting

The inefficient use of energy that leads to unnecessary consumption and increased environmental pollution.

Hydropower

A method of generating electricity by converting the energy of flowing or falling water.

Active Solar Heating

A system that uses solar energy to heat a fluid, usually water or air, and then circulates it to transfer heat directly to the interior space or to a storage system for later use.

Heat-Absorbing Fluid

A fluid that absorbs heat during a process, used in various applications such as heating and cooling systems.