Question

Which statement about value-added taxes best develops the central idea of this text?

A. They are added on to the cost of items sold.
B. They are set at a specific rate.
C. They help states pay for public services.
D. They include taxes paid by the manufacturers.

This is from the story "The Price isn't always Right"

Answer 1

The correct answer is A.

It's not B because the text tells that everyone who pays this value-added tax pays the same (19% of the cost of the product minus the already paid value-added taxes). This rate is variable depending on the number of intermediaries and the amount that they already paid.

It's not C because the text does not say anything about the use of the taxes money by the state.

D isn't correct because the text also includes taxes paid by other intermediaries like hose manufacturers and retail stores.