Question

Under current tax codes, people receive deductions on their tax liability for donations made to charities. This is an example of

A) scarcity.
B) productivity.
C) positive incentives.
D) negative incentives.

Answer 1

your answer is c because they put donations in for charity!

Answer 2

The third answer is correct (C).

This is an example of positive encouragement.

An incentive is considered as a stimulus that is offered to a person, company or industry with a specific purpose like increasing the productivity of the economy or increasing the tax revenue.

In the case described, the incentive aims to boost a social cause, that is, to help a vulnerable group.