What Does the Fact That Most Countries' Economies Lie near the Straight

question 119

Multiple Choice

What does the fact that most countries' economies lie near the straight, slanting line in the graph below indicate?

• A) Most countries exercise tight control over their money supplies.
• B) The rate at which prices rise is closely tied to the rate of money supply expansion.
• C) In most countries, the inflation rate is very low.
• D) It is very difficult for a government to shift the inflation rate away from its natural level.
• E) The size of the money supply is determined almost entirely by the movement of prices.

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Definitions:

Employer's Portion

The part of employment taxes and benefits that the employer is responsible for paying, separate from employee withholdings.

Taxes

Mandatory financial contributions imposed by a government on individuals, corporations, and other entities to fund public expenditures.

FICA

FICA stands for the Federal Insurance Contributions Act and refers to the taxes collected to fund Social Security and Medicare programs in the United States.

SUTA

A state-level tax paid by employers to fund the state’s unemployment insurance program.