Temporary Tax Cuts Would Cause

question 65

Multiple Choice

Temporary tax cuts would cause

• A) the AA-curve to shift left.
• B) the AA-curve to shift right.
• C) the DD-curve to shift left.
• D) the DD-curve to shift right.
• E) a shift in the AA-curve, although the direction is ambiguous.

---

Definitions:

Transfer Price

The price at which goods and services are sold between divisions within the same company, used for internal sales and profit allocation.

Variable Cost

Costs that change in proportion to the goods or services that a business produces.

General Transfer-Pricing Rule

A framework or methodology used to determine the price for goods or services transferred between divisions or subsidiaries of the same company.

Goal Congruence

A condition in which the goals of the organization's different members or departments align and support the overall objectives of the organization.