Author Question: Which aggregate supply curve has a positive slope? A) both long run and short run B) neither long ... (Read 96 times)

leo leo

  • Hero Member
  • *****
  • Posts: 566
Which aggregate supply curve has a positive slope?
 
  A) both long run and short run B) neither long run nor short run
  C) short run only D) long run only

Question 2

What is the underground economy and how could it hurt an economy? How does it hurt developing economies?
 
  What will be an ideal response?



connor417

  • Sr. Member
  • ****
  • Posts: 329
Answer to Question 1

C

Answer to Question 2

The underground economy is that part of the economy involved in buying and selling of goods and services that are concealed from government to avoid taxes or regulations or because the goods and services are illegal. This sector of the economy can serve as a drag on the economy. Firms that participate in the underground economy face the possibility of the government finding out about their operations and shutting them down because they are acting illegally. They tend to be smaller, and invest less in capital. Since workers in this sector have less capital to work with, they are less productive, and produce fewer goods and services. The firm also incurs costs to avoid discovery by the government by paying bribes and hiring lookouts. These are resources that could be used in other productive activities. Because of these reasons, this sector of the economy is not as productive as it might be if it were legal. Less goods and services are produced. This is not an insignificant problem as the underground sector can be large in developing countries as high tax rates drive many firms to the underground sector to seek ways to avoid taxes.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

Women are two-thirds more likely than men to develop irritable bowel syndrome. This may be attributable to hormonal changes related to their menstrual cycles.

Did you know?

Children of people with alcoholism are more inclined to drink alcohol or use hard drugs. In fact, they are 400 times more likely to use hard drugs than those who do not have a family history of alcohol addiction.

Did you know?

Approximately one in three babies in the United States is now delivered by cesarean section. The number of cesarean sections in the United States has risen 46% since 1996.

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

For a complete list of videos, visit our video library