-In the Above Figure, If the Economy Is Initially at Point

question 67

Multiple Choice

-In the above figure, if the economy is initially at point c, the short-run effect of a hike in the federal funds rate is given by movement from point

• A) c to point d, decreasing output and increasing the unemployment rate.
• B) c to point d, increasing output and decreasing the unemployment rate.
• C) c to point b, increasing output and decreasing the unemployment rate.
• D) c to point a, keeping output and the unemployment rate constant.

---

Definitions:

Non-Eligible Dividends

Dividends that are paid out from earnings that have not been taxed at the corporate level, often subject to different tax treatment at the recipient's level.

Capital Gains

The profit realized from the sale of assets such as stocks, bonds, or real estate, when the selling price exceeds the purchase price.

Marginal Tax Rates

The rate at which the last dollar of income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Total Tax

Total tax refers to the combined amount of all taxes owed by an individual or business entity in a given tax period, including federal, state, and local taxes.