Figure 21-2

question 338

Multiple Choice

Figure 21-2. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs.
-Refer to Figure 21-2. If the graphs apply to an economy such as the U.S. economy, then the slope of the AD curve is primarily attributable to the

• A)wealth effect.
• B)interest-rate effect.
• C)exchange-rate effect.
• D)Fisher effect.

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Definitions:

Wage Bracket Withholding Table

A table used by employers to determine the amount of tax to withhold from an employee's wages based on their earnings and tax bracket.

Federal Income Tax Withholding

The amount of an employee's pay withheld by the employer and sent directly to the government as partial payment of income tax.

FICA Payroll Tax

Federal Insurance Contributions Act tax, a U.S. law requiring a deduction from employees' paychecks and employer contributions to fund Social Security and Medicare.

Social Security

A government program that provides financial assistance to people with inadequate or no income, especially the elderly, disabled, and unemployed.