Which of the Following Would Be the Theoretical Outcome of Expansionary

question 167

Multiple Choice

Which of the following would be the theoretical outcome of expansionary fiscal policy in the following aggregate demand-aggregate supply model?

• A) The aggregate demand A
• D) curve would shift from AD₁ to AD₂.
• B) The short-run aggregate supply SRA
• S) curve would shift from SRAS₂ to SRAS₁.
• C) The short-run aggregate supply SRA
• S) curve would shift from SRAS₁ to SRAS₂.
• D) The aggregate demand A
• D) curve would shift from AD₁ to AD₂ at the same time that the SRAS curve would shift from SRAS₁ to SRAS₂.
• E) The aggregate demand A
• D) curve would shift from AD₂ to AD₁.

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Definitions:

Double Taxation

The imposition of tax by two or more jurisdictions on the same declared income, asset, or financial transaction.

S Corporation

A type of corporation in the United States that elects to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code, allowing profits to be passed directly to shareholders and avoid double taxation.

Promoters

Individuals or entities that take the initiative in founding and organizing a business or corporation, often responsible for its early management and securing of initial capital.

Incorporation Process

The legal procedure through which a business entity is formed and recognized as a corporation under the law, providing it with certain legal rights and protections.