From an initial equilibrium in the ad-as model, an increase in consumption growth will initially cause inflation:
a. and real growth to remain unchanged.
b. and real growth to increase.
c. to increase and real growth to remain unchanged.
d. to increase and real growth to decrease.

See explanation

Explanation:

a. What is the amount of tax penalty that Eggers is risking by taking this position?

The amount of tax penalty that Eggers is risking by taking this position will be:

= $400,000 × 20%

= $400,000 × 20/100

= $400,000 × 0.2

= $80,000

The 20% used is the penalty charged when a claim is more than the final amount that's being allowed by the court or the IRS.

b.What would be the result if there was a 45% chance that Eggers’ interpretation of the Regulation was correct?

The result in this case if there was a 45% chance that Eggers’ interpretation of the Regulation was correct will be that Eggers will have zero tax penalty given. This is because since a reasonable cause was shown by the corporation, the penalty will be waived.