A Reduction in the Inflation Rate Would Make Relative Prices

question 61

Multiple Choice

A reduction in the inflation rate would make relative prices

• A)less variable,making it more likely that resources will be allocated to their best use.
• B)less variable,making it less likely that resources will be allocated to their best use.
• C)more variable,making it more likely that resources will be allocated to their best use.
• D)more variable,making it less likely that resources will be allocated to their best use.

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Definitions:

Tax Bracket

A range of incomes taxed at a particular rate under a progressive tax system.

Capital Asset

An asset held by an individual or business for investment or personal purposes, excluding inventory or assets sold in the ordinary course of a business.

Rental Property

A property owned by an individual or entity that is rented out to tenants in exchange for monthly rent payments.

Section 1245

A provision in the U.S. tax code that treats the gain from the sale of certain types of property (primarily depreciable personal property) as ordinary income rather than capital gain.