When Paul Listened to the Presidential Candidate Debates,he Heard One

question 7

Multiple Choice

When Paul listened to the presidential candidate debates,he heard one candidate proposing to increase taxes and the other candidate responding that this would cause firms to decrease production.How would this be described by an economist?

• A) As taxes increase,there is a decrease in quantity supplied.
• B) As taxes increase,there is an increase in quantity supplied.
• C) As taxes increase,there is an increase in supply.
• D) As taxes increase,there is a decrease in supply.
• E) As taxes increase,there is an increase in supply and in quantity supplied.

---

Definitions:

Informational Returns

Tax documents used to report certain types of transactions to the IRS, including income, interest, dividends, but not directly tax-deductible amounts.

Straight-Line Method

A method of calculating depreciation for accounting purposes, allocating a uniform expense amount to each year of an asset's useful life.

Depreciated

A decrease in the value of an asset over time, often due to wear and tear or obsolescence, which can be used for tax deductions.

Primarily Personal Property

Items or assets that are mainly used for personal, non-business purposes, which may include vehicles, furniture, and electronics.