A Transfer Payment Is

question 7

Multiple Choice

A transfer payment is

• A)a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location.
• B)a payment that is automatically transferred from your bank account to pay a bill or some other obligation.
• C)a form of government spending that is not made in exchange for a currently produced good or service.
• D)the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.

Recognize the relationship between the size of a tax and its resulting deadweight loss.

Understand how taxes influence buyer and seller behaviors in terms of market participation and economic welfare.

Analyze the effects of taxes on specific market scenarios including service transactions.

Comprehend the factors that determine the magnitude of the shrinkage in equilibrium quantity due to taxation.

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Definitions:

Surplus Cash

Excess funds that a company retains over its necessary working capital and capital expenditure requirements, often available for investment or distribution.

Dividends

A portion of a company's earnings distributed to shareholders, often in the form of cash or additional stock.

Internal Revenue Code

The comprehensive set of tax laws in the United States, governed by the Internal Revenue Service (IRS), that dictates federal tax obligations.

Federal Income Taxes

Taxes imposed by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.