On a Graph Showing Real National Income on the Vertical

question 50

Multiple Choice

On a graph showing real national income on the vertical axis and time on the horizontal axis,the fluctuations of real national income around the trend-line would indicate the

• A)business cycle.
• B)distribution of income.
• C)inflation rate.
• D)path of potential output.
• E)unemployment rate.

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Definitions:

Pretax Accounting Income

The income an organization has earned before any taxes have been deducted, used to calculate taxable income after adjusting for any differences between accounting and tax regulations.

Enacted Tax Rate

The tax rate established by law that is applied to income or transactions.

Income Tax Expense

The total amount of income tax a company expects to pay to tax authorities relative to its taxable income.

Deferred Tax Asset

A financial item on a company's balance sheet representing taxes paid or carried forward that can be used to offset future tax liabilities.