The relationship in the above figure suggests that when the interest rate is 5 percent
A) a decrease in income will be associated with a decrease in expenditures.
B) a decrease in income will be associated with an increase in expenditures.
C) an increase in income will be associated with a decrease in expenditures.
D) there is no relationship between expenditures and income.
A
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Faced with a shortage of funds to pay claims, the workman's compensation systems in many states have been forced to raise the workman's compensation tax rate substantially. The tax is paid by employers. Employers have complained that they cannot afford the tax and threaten to go out of business. Assuming the supply of labor is very inelastic, one can argue that ultimately the burden of this tax
actually will rest a. mostly on workers. b. mostly on employers. c. about 50/50 on workers and employers, like the Social Security tax. d. all on employers by statute.