You are given a background paragraph that describes one or more causal or qualitative relationships such as a relationship in economics or a scientific law and a story that makes use of the concepts or the relationship described in the provided paragraph. You are also given a question about the story that requires an understanding of the relationship described in the background paragraph and the story. You need to come up with an answer to the given question; the answer will be a span from either the question or the story. In order to correctly answer the given question, you need to understand the relationship mentioned in the background paragraph and should be able to use it to understand that in the story. Your answer can not consist of any word that is not mentioned in any of these: the background paragraph, the story, or the question. You can directly copy and paste a span from the story or the question while answering the given question.

[EX Q]: Background Paragraph: The classical explanation of gravity is that a force of attraction acts at a distance between two objects and the magnitude of the force is directly proportional to each of the masses and inversely proportional to the square of the distance between the objects. The objects move toward each other due to this force of attraction. Einstein's new concept of gravity states that matter (mass) causes the space around the matter to curve and also distorts time. A straight line through this curved space would also be curved in order to be a straight line.
Story: Rob is an amateur astronomer. Recently, he detected four asteroids, asteroid A, asteroid B, asteroid C, and asteroid D. Asteroid A and asteroid B are of the same mass, but asteroid A is farther from the earth than asteroid B. Asteroid C and asteroid D are at the same distance form the earth, but asteroid C has more mass than asteroid D. He also figured out that all of these asteroids have less mass than earth.
Question: In clssical theory, if Rob needs to find out the object with stronger gravitational pull, which one would he choose, earth or asteroid A?
[EX A]: earth.

[EX Q]: Background Paragraph: The trade-off theory of capital structure is the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. The classical version of the hypothesis goes back to Kraus and Litzenberger[1] who considered a balance between the dead-weight costs of bankruptcy and the tax saving benefits of debt. Often agency costs are also included in the balance. This theory is often set up as a competitor theory to the pecking order theory of capital structure. A review of the literature is provided by Frank and Goyal.[2]

An important purpose of the theory is to explain the fact that corporations usually are financed partly with debt and partly with equity. It states that there is an advantage to financing with debt, the tax benefits of debt and there is a cost of financing with debt, the costs of financial distress including bankruptcy costs of debt and non-bankruptcy costs (e.g. staff leaving, suppliers demanding disadvantageous payment terms, bondholder/stockholder infighting, etc.). The marginal benefit of further increases in debt declines as debt increases, while the marginal cost increases, so that a firm that is optimizing its overall value will focus on this trade-off when choosing how much debt and equity to use for financing.
Story: Company X stopped taking on more debt, and decided to file for bankruptcy, while company Y, kept benefiting from the tax benefits of debt, having a lower debt level.
Question: Which company discharged more debt, company X or company Y?
[EX A]: company X.

[EX Q]: Background Paragraph: The Laffer curve depicts the amount of government revenue as a function of the rate of taxation. It shows that for a tax rate above a certain critical rate, government revenue starts decreasing as the tax rate rises, as a consequence of a decline in labour supply. This theory supports that, if the tax rate is above that critical point, a decrease in the tax rate should imply a rise in labour supply that in turn would lead to an increase in government revenue.
Story: After the second world war Germany and France took two different policies in respect to taxation. After the war Germany, then West Germany, has mostly elected pro-capitalist governments. As a consequence, Germany implemented tax rate below the critical rate. But France took the other way. Their mostly pro-socialist governments implemented tax rate above the critical rate. As a result, businesses had to make informed decisions while doing business in these countries.
Question: Which country would have lower labor supply in response to their taxation?
[EX A]:
France.