If Tax Reduction and Simplification Are Effective, Then

question 56

Multiple Choice

If tax reduction and simplification are effective, then:

• A)real wages will increase as labour supply and labour demand increase.
• B)saving and investment in new capital will increase.
• C)interest rates will increase in financial markets and the demand for financial assets will fall.
• D)fewer new firms will be established, since existing firms will make more profit.

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Definitions:

Parent Entity

A company that owns enough voting stock in another corporation to control management and operations by influencing or electing its board of directors.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements to combine the financial information of a parent company and its subsidiaries.

Non-controlling Interest

The portion of equity interest in a subsidiary not held by the parent company.