Classify Each of the Following Statements

question 17

Multiple Choice

Classify each of the following statements.
-Maggie purchased an insurance policy on Jim's life and designated Susan as the beneficiary. Four years later, Jim dies, and Susan collects the insurance proceeds.

• A)No taxable transfer occurs.
• B)Gift tax applies.
• C)Estate tax applies.

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Definitions:

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the total output produced by firms in the market over a long period, assuming input factors are variable.

Upward-Sloping

Refers to a line on a graph that demonstrates an increase in value on the vertical axis as the value on the horizontal axis increases; typically related to supply curves in economics.

Pure Competition

Another term for a purely competitive market, emphasizing the absence of barriers to entry and the presence of numerous sellers and buyers.