Starting from Short-Run Equilibrium,the Following Occurs: Personal Income Taxes Rise

question 96

Multiple Choice

Starting from short-run equilibrium,the following occurs: personal income taxes rise and foreign real national income rises.What is the effect on the price level and Real GDP in the short run?

• A) The price level rises and Real GDP falls.
• B) The price level falls and Real GDP falls.
• C) The price level rises and Real GDP rises.
• D) The price level falls and Real GDP rises.
• E) There is not enough information to answer this question.

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Definitions:

Standard Deviation

A measure of the dispersion or variability of a set of values, indicating how much the values differ from the mean of the set.

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