Which type of economic institution works to provide services to a community and does not pay taxes?
A. Bank
B. Market
C. Non-profit
D. Labor union
C. Non-profit
C. Non-profit
The correct answer is C. Non-profit.
A non-profit institution is an organization that operates to benefit the public or a specific cause, rather than to generate profits for its owners or shareholders. Non-profit institutions are typically exempt from paying taxes because their primary mission is to provide services or support to the community, rather than earning profits for private individuals or shareholders.
To arrive at this answer without assistance, you can carefully analyze the characteristics of each option and eliminate those that do not fit the description.
A. Bank: Banks are financial institutions that provide various services, including loans, deposits, and money management. While banks may offer services to a community, they are generally for-profit entities that do pay taxes.
B. Market: A market is a system where buyers and sellers exchange goods or services. Markets themselves are not institutions and do not provide services directly to the community.
C. Non-profit: Non-profit institutions are established to contribute to the public good and provide services, such as education, healthcare, or social welfare. They are exempt from paying taxes because of their focus on serving the community rather than generating profits.
D. Labor union: Labor unions are organizations formed by workers to represent their collective interests and negotiate with employers for better working conditions, wages, and benefits. While they provide services to their members, they are not typically exempt from paying taxes.
By considering the characteristics of each economic institution, you can identify a non-profit organization as the correct answer – an institution that operates to serve the community and does not pay taxes.