The Primary Effect of an Inheritance Tax Is _____

question 30

Multiple Choice

The primary effect of an inheritance tax is _____.

• A)to encourage the liquidation of assets
• B)provide significant government revenue
• C)encourage capital formation
• D)the encouragement of pre-death asset transfers

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Definitions:

Contractual Interest Rate

The interest rate stated on the face of a loan or bond agreement, which represents the percentage of interest that the borrower must pay to the lender.

Premium

The amount paid for an insurance policy or the amount by which a bond or stock sells above its face value.

Discount

A reduction from the usual cost of something, often used to encourage prompt payment or increase sales.

Market Interest Rate

The prevailing rate of interest that borrowers and lenders can expect to transact at in the broader financial market, influenced by supply and demand.