The Figure Below Shows Two Lorenz Curves, Y and Z

question 92

Multiple Choice

The figure below shows two Lorenz curves, Y and Z. Figure 33.1 In Figure 33.1, which of the following could occur in the short run given the introduction of a regressive income tax?

• A)The Lorenz curve OZB would shift to OYB.
• B)The Lorenz curve OYB would coincide with the line OXB.
• C)The Lorenz curve OZB would coincide with the line OXB.
• D)The Lorenz curve OYB would coincide with the horizontal axis.
• E)The Lorenz curve would shift from OYB to OZB.

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Definitions:

Operating Activities

Activities that relate directly to the primary operations of the company, such as production, distribution, marketing, and selling of goods and services.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate the cash from operations.

Accounts Receivable

Represents money owed to a company by customers for products or services sold on credit.

Indirect Method

A method of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash from operating activities.