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How Do Tax Cuts and Government Expenditure Affect Aggregate Demand

question 47

Multiple Choice

How do tax cuts and government expenditure affect aggregate demand?


Definitions:

Medicare Tax

A federal tax that funds Medicare, health insurance for individuals over 65; deducted from employees' paychecks.

Payroll Tax Expense

Taxes that employers are required to pay on behalf of their employees, such as social security and Medicare taxes.

Social Security Tax

A tax imposed on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Medicare Tax

A federal tax that funds the Medicare program, deducted from the earnings of employees and matched by employers.

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