Assuming That the Economy Is in the Long Run Equilibrium

question 171

Multiple Choice

Assuming that the economy is in the long run equilibrium at full employment, an expansionary monetary policy _______ the price level and _______ output.

• A) increases; doesn't change
• B) increases; increases
• C) doesn't change; doesn't change
• D) decreases; increases

---

Definitions:

Income Tax Revenue

The monetary income that the government receives from taxing the income of individuals, corporations, estates, and trusts.

Welfare System

A government program that provides financial aid and services to support groups within society who are unable to support themselves financially.

Efficiency And Equality

The balance between optimizing resource use and distributing goods and services fairly among society members.

Careful Planning

The process of meticulously organizing actions and tasks ahead of time to achieve a desired goal.