Problem One
1: True partners are called members
2: True too. There is only limited liability
3: False: LLCs are not a separate Tax Entity
4: True. It's not in your notes, but members are not held responsible for the criminal acts of an LLC
5: True Members are taxed on their own tax returns.
1 2 4 and 5 are all true. Only 3 is false.
Problem Two
Inflation shows up very slowly and then takes hold with a vengeance. I would say we are currently in an inflation spiral but it is just starting. Just ask your mum about food prices (or your dad about overall cost of living).
The first thing the government must do is take action when they see something happening. They can do one of two things: the can cut expenditures or raise taxes. They can do the former anytime, the latter will take time to happen.
I think the second step is to gear down manufacturing beginning in January.
Producers know that they should manufacture less because consumers will have less money, but when to start doing that is the question. March or April is when the Tax Payer notices the tax increase.
Inflation will decrease is the last step. But this is an iffy question. The second and third steps could be interchanged. The way I have written it is the way I would have answered it, but I can't be certain.
