In Early July 2012, Gavin Is Audited by the IRS

question 134

Essay

In early July 2012, Gavin is audited by the IRS and a large deficiency is assessed.In October of the same year, his income tax return for the state is audited.What has probably happened?

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Definitions:

Resource Prices

The cost of inputs used in the production of goods and services, such as labor, raw materials, and capital.

Market System

An economic system relying on market forces to allocate resources and to determine and regulate prices for goods and services.

What Will Be Produced

A fundamental economic question that addresses the kinds of goods and services to be made available in an economy, determined by factors such as resources, technology, and consumer preferences.

Consumer Sovereignty

The idea that what consumers want influences the goods and services produced in an economy.