Policies That Deter Investment Such as an Increase in the Corporate

question 108

Multiple Choice

Policies that deter investment such as an increase in the corporate profit tax rate,

• A) will increase aggregate demand due to increased tax revenue, and eventually shift the long-run aggregate supply (LRAS) curve to the right of where it would have been.
• B) will reduce aggregate demand, and eventually shift the LRAS curve to the left of where it would have been.
• C) will initially increase aggregate demand due to increased tax revenue, but eventually shift the long-run aggregate supply (LRAS) curve to the left of where it would have been.
• D) will initially reduce aggregate demand, but eventually shift the LRAS curve to the right of where it would have been as firms raise prices to compensate for the tax increase.

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Definitions:

Management

The process of directing and controlling a group or organization to achieve specific goals or objectives efficiently and effectively.

Cash Short and Over

An account that records discrepancies between actual cash received and the expected amount, often due to errors or theft.

Cash Shortages

Instances when the actual cash available is less than the amount expected or needed.

Cash Overages

Excess of actual cash received over the expected amount, often caused by either errors in transactions or more sales than recorded.