Increasing Tax Rates on Businesses Can Be Justified Based on Equity

question 97

Multiple Choice

Increasing tax rates on businesses can be justified based on equity considerations when

• A) Perfectly competitive conditions exist.
• B) The tax is a flat tax.
• C) Externalities exist.
• D) Long-run economic profits exist.

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Definitions:

Anticommunist Hysteria

A period characterized by heightened fear and suspicion of communism and its potential spread in the United States, especially during the Cold War era.

Second World War

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers.

Consequences

The outcomes or results that naturally follow from an action or condition, often used in the context of discussing the effects of decisions or events.

Sunbelt Growth

The demographic expansion and economic growth in the southern and southwestern regions of the United States, particularly noted from the latter half of the 20th century onwards.