Which of the Following Is True

question 172

Multiple Choice

Which of the following is true?
i.If demand is perfectly elastic,the tax creates no deadweight loss.
ii.The more elastic the supply of a factor of production,the greater is the deadweight loss from an income tax.
iii.A tax is regressive if the average tax rate rises with income.

• A) only i
• B) only ii
• C) only iii
• D) ii and iii
• E) i and ii

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Definitions:

Spreadsheet Method

The spreadsheet method involves using software applications with rows and columns to organize, calculate, and analyze data, often for accounting and financial planning.

Retained Earnings

These are the profits that a company has decided to keep or reinvest in the business rather than distribute to shareholders as dividends.

Analyzing Noncash Accounts

Examining accounts that involve transactions not involving cash, such as depreciation, amortization, and accrued expenses.

Outflow of Cash

Financial transactions that result in the expenditure of cash from a business, such as payments for expenses, investing activities, and financing activities.