Exhibit 16

question 76

Multiple Choice

Exhibit 16.2.Typically,the sales volume declines with an increase of a product price.It has been observed,however,that for some luxury goods the sales volume may increase when the price increases.The following Excel output illustrates this rather unusual relationship. Refer to Exhibit 16.2.What can be said about the linear relationship between Price and Sales?

• A)The relationship is negatively moderate.
• B)There is no relationship.
• C)The relationship is positively strong.
• D)The relationship is negatively strong.

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Definitions:

Consumption Tax

A tax on the purchase of goods or services, levied at the point of sale, designed to tax spending rather than income or savings.

Encourage Consumption

Measures or strategies aimed at increasing consumer spending and demand for goods and services.

Federal Income Tax

A tax levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Ability-To-Pay Principle

A taxation principle that suggests taxes should be levied according to an individual's or entity's ability to pay, favoring a more equitable distribution of the tax burden.