The Local Operations Manager for the Internal Revenue Service Must

question 21

Multiple Choice

The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (in thousands of dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows: $$\begin{array} { | l | l | l | l | } \hline { \begin{array} { l } \text { NUMBER } \\\text { OF } \\\text { EXAMINERS }\end{array} } & { \text { COMPLIANCE } } \\\hline & \text { LOW } & \text { NORMAL } & \text { HIGH } \\\hline \text { One } & 50 & 50 & 50 \\\hline \text { Two } & 100 & 60 & 20 \\\hline \text { Three } & 150 & 70 & - 10 \\\hline\end{array}$$ If she feels the chances of low, medium, and high compliance are 20 percent, 30 percent, and 50 percent respectively, what is her expected value of perfect information?

• A) $16,000
• B) $26,000
• C) $46,000
• D) $48,000
• E) $50,000

Analyze the effects of fluctuations in the exchange and interest rates on the open-economy macroeconomic model.

Identify historical trends of U.S. economic indicators and their implications.

Understand the impact of interest rate changes on international asset transactions.

Explain the dynamics of surplus and deficits in the foreign exchange market and their effects on net exports.

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Definitions:

Economic Questions

Fundamental queries about how societies allocate scarce resources among competing uses, typically including what to produce, how to produce, and for whom to produce.

Market Forces

The natural factors in a free market that determine prices, distribution, and the availability of goods and services through the principles of supply and demand.

Basic Questions

Fundamental inquiries that address the core aspects of a subject or problem.