If the Price Level Increases from 200 in Year 1

question 47

Multiple Choice

If the price level increases from 200 in year 1 to 220 in year 2,the rate of inflation from year 1 to year 2 is

• A)20%.
• B)10%.
• C)11%.
• D)120%.

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Definitions:

Tax Cuts

Reductions in the amount of taxes imposed by the government on individuals or businesses.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period.

Fiscal Programs

Government initiatives that involve expenditure and taxation decisions to influence the national economy.

2008-2009 Recession

A severe global economic downturn triggered by the financial crisis, marked by significant declines in consumer wealth, extensive layoffs, and a contraction in economic activity.