In the Long Run,both Supply and Demand Tend to Become

question 13

Multiple Choice

In the long run,both supply and demand tend to become more elastic.This suggests that,in the long run,the

• A) deadweight loss from a tax will be less than it is in the short run.
• B) deadweight loss will be zero.
• C) government will likely reduce tax rates.
• D) tax revenue will be lower than it is in the short run.
• E) tax revenue will be higher than it is in the short run.

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Definitions:

Operating Activity

Transactions and events related to the primary operations of a business, such as selling products or services.

Revenue Activity

Activities undertaken by a business that result in the earning of income, typically from the sale of goods or provision of services.

Cash Investments

Financial assets such as stocks, bonds, or real estate purchased with the expectation of generating a return on investment.

Statement of Cash Flows

A financial statement detailing the impact of alterations in balance sheet accounts and income on cash and cash equivalents, segmented into operating, investing, and financing activities.