Exhibit 17-1 -According to Those Who Favor a Passive Approach to Policy

question 125

Multiple Choice

Exhibit 17-1
-According to those who favor a passive approach to policy, where will the economy in Exhibit 17-1 end up when it achieves its potential output?

• A)point A
• B)point B
• C)point C
• D)either point B or C
• E)unable to tell from the information given

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Definitions:

Personal-Use Property

Items owned for personal enjoyment or use, such as a residence or car, that typically do not qualify for tax deductions or depreciation.

FMV

Fair Market Value is an estimate of the market value of a property or asset, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller.

§179 Expense

A section of the U.S. tax code that allows a business to deduct the full purchase price of qualifying equipment or software within the tax year.

Business Assets

Economic resources or items of value owned by a company that are expected to provide future benefits or profits.