The Labels for the Axes of an Aggregate Supply Curve

question 5

Multiple Choice

The labels for the axes of an aggregate supply curve should be

• A) real domestic output for the vertical axis and price level for the horizontal axis.
• B) real domestic output for the horizontal axis and price level for the vertical axis.
• C) real employment for the vertical axis and price level for the horizontal axis.
• D) aggregate demand for the vertical axis and real national output for the horizontal axis.

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Definitions:

Budget Line

A graphical depiction in economics that shows all possible combinations of two goods that can be purchased with a fixed amount of income.

Tax Rate

The percentage at which an individual or corporation is taxed.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization.

Utility Function

A mathematical representation that ranks individual preferences for various goods or services, depicting how choices provide levels of satisfaction or utility.