In year 1, Smith, a divorced person, provided over one half the support for his widowed mother, Ruth, and his son, Clay, not of whom as US citizens. During year 1, Ruth did not live with Smith. She received $9000 in social security benefits. Clay, a 25 year old full time graduate student, and his wife lived with Smith. Clay had no income but filed a joint return for year 1, owing an additional $500 on taxes on his wife's income. How many exemptions was Smith entitled to claim on his year 1 tax return? a. 1
b. 3
c. 4
d. 2

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?