When the Actual Price Level in an Economy Turns Out

question 20

Multiple Choice

When the actual price level in an economy turns out to be lower than that expected in the short run,_____.

• A)businesses cut back production
• B)the potential output level decreases
• C)the aggregate supply curve shifts leftward
• D)the aggregate supply curve shifts rightward
• E)an expansionary gap develops

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Definitions:

Wage and Tax Statement

A document, often referred to as a W-2 form in the United States, that an employer provides to employees annually for tax filing purposes.

FUTA Taxes

Federal unemployment taxes levied on employers to fund state workforce agencies and unemployment insurance for workers who have lost their jobs.

Calendar Quarter

A period of three months on the calendar used for financial and business reporting, starting from the beginning of January, April, July, or October.