Which of the Following Is Consistent with Constant Inflation of 2

question 114

Multiple Choice

Which of the following is consistent with constant inflation of 2%: expected future inflation of ________,output-gap inflation of ________,and supply-shock inflation ________.

• A)2%; 2%; 2%
• B)2%; 0%; -2%
• C)2%; 0%; 0%
• D)0%; 1%; 1%
• E)0%; 0%; 2%

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Definitions:

Taxable Income

The amount of an individual's or company's income used to determine how much tax is owed, calculated as gross income minus deductions and exemptions.

Standard Deduction

A predefined tax deduction that reduces the income subject to tax, available to all taxpayers who do not itemize deductions.

Joint Return

A tax return filed by a married couple who combine their income, deductions, and credits on a single form.

Taxable Income

Income that is subject to taxation, after deductions and exemptions, according to the tax laws.