Which of the Following Statements Is True

question 140

Multiple Choice

Which of the following statements is true?

• A)Redistribution of income through taxation results in greater income for everyone.
• B)There is no tradeoff between efficiency and equity.
• C)If taxes are so high that people work a lot less, the redistribution of income could make everyone worse off.
• D)The pursuit of greater equity through taxation and redistribution may promote efficiency by making everyone happier.
• E)Only the rich are negatively affected by very high tax rates.

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Definitions:

George Miller

A pioneering cognitive psychologist best known for his theory that the span of immediate memory and absolute judgment is limited to an average of seven items.

Magic Number

A concept in cognitive science referring to the limit of items an average human mind can hold in working memory, commonly thought to be seven plus or minus two.

Working Memory

An active system that processes the information in short-term memory.

Central Executive

A component of working memory model that oversees and regulates the flow of information from and to its subsidiary systems.