Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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If a firm manager has a base salary of $100,000 and also receives 5 percent of all profits, what percentage of his/her final income will be from a profit-sharing plan when profit equals $1,500,000?
A. 51 percent B. 48 percent C. 27 percent D. 43 percent
Which of the following forms of taxation accounts for the largest share of taxes received by state and local governments?
A) sales, excise, and gross receipts taxes B) personal and corporate income taxes C) license and permit fees D) property taxes
If a 10 percent increase in the price of one good A results in an increase of 5 percent in the quantity demanded of another good B, then it can be concluded that the two goods A and B are:
A. Complementary goods B. Substitute goods C. Independent goods D. Normal goods
Technological change allows the economy to produce more output with the same amount of capital and labor
Indicate whether the statement is true or false