The Graph Shown Displays Various Economic Outcomes

question 15

Multiple Choice

The graph shown displays various economic outcomes. If the economy is currently at equilibrium D, to bring the economy back to its long-run equilibrium the government might:

• A) decrease spending.
• B) decrease income taxes.
• C) increase corporate income taxes.
• D) All of these would move the economy back to its long-run equilibrium from point D.

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Definitions:

FOB Shipping Point

A shipping term indicating that the buyer takes responsibility for goods and their transportation costs as soon as the goods leave the seller's premises.

Goods In Transit

Merchandise or stock that has been shipped by the seller but has not yet been received by the purchaser.

FIFO Method

"First In, First Out," an inventory valuation method assuming goods first purchased or produced are the first to be sold.

Perpetual Inventory System

An inventory system that tracks merchandise in real-time, updating inventory records immediately upon purchase or sale.