The Effect of an Increase in Aggregate Supply Is A(n)

question 48

Multiple Choice

The effect of an increase in aggregate supply is a(n) :

• A) increase in the general level of prices and a decrease in real output.
• B) increase in the general level of prices and an increase in real output.
• C) decrease in the general level of prices and a decrease in real output.
• D) decrease in the general level of prices and an increase in real output.

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Definitions:

Medicare Taxes

Taxes collected from employees and employers to fund the Medicare program, which provides healthcare benefits to retirees.

State Income Taxes

Taxes imposed by individual states on the income generated by businesses and individuals within that state.

Liability Account

A type of accounting record that shows the obligations or debts a company owes to others.

Withheld FICA Taxes

Taxes deducted from employees' paychecks to fund Social Security and Medicare, which employers also match.