Use the Figure Below to Answer the Following Questions

question 123

Multiple Choice

Use the figure below to answer the following questions.

Figure 3.4.1
-At price P₃ in Figure 3.4.1,

• A)this market is in equilibrium.
• B)there is a shortage in the amount of Q₅ - Q₁.
• C)there is a tendency for the price to rise.
• D)equilibrium quantity is Q₅.
• E)there is a surplus in the amount of Q₅ - Q₁.

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Definitions:

Federal Spending

Expenditures by the federal government on various programs, infrastructure, and services, financed by taxes and other revenues.

Payroll Tax

Obligations enforced on either the workforce or the employers, generally estimated as a share of the compensation employers offer to their staff.

Proportional Taxes

Taxes that are imposed at a constant rate regardless of the income level of the taxpayer.

Regressive Effect

A situation where a tax or fiscal policy disproportionately affects lower-income individuals, making them pay a higher percentage of their income than wealthier individuals.