Which of the Following Policies Would Reduce the User Cost

question 85

Multiple Choice

Which of the following policies would reduce the user cost of capital?

• A)a reduction in the money supply
• B)a reduction in the personal income tax rate
• C)an increase in the corporate profit tax rate
• D)an increase in an investment tax credit

---

Definitions:

Liquidation Date

The predetermined date on which an investment or venture is terminated, and all assets are liquidated.

Defined Contribution Pension Plan

A retirement plan where both employer and employee contribute to an individual account for the employee, with benefits depending on investment performance.

Bears All The Risk

A term indicating that one party in a transaction is responsible for any financial losses or risks that may arise, commonly used in insurance and investment contexts.

Variable Life

A type of life insurance policy that includes an investment component, where the cash value and death benefit can vary based on the performance of the investments.