For a Given Increase in Aggregate Demand,the Steeper the Short-Run

question 73

Multiple Choice

For a given increase in aggregate demand,the steeper the short-run aggregate supply curve:

• A)the larger the increase in investment expenditure.
• B)the smaller the increase in the price level.
• C)the smaller the increase in real GDP.
• D)the larger the increase in real GDP.
• E)the smaller the increase in real interest rate.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or expenditure), revealing the percentage of income paid in taxes.

Tax Liability

The total amount of tax owed to the government by an individual, corporation, or other entity in a given tax period.

Taxable Income

The amount of income that is used to calculate an individual or a corporation's income tax due, after all deductions and exemptions.

Federal Unemployment Compensation

Financial assistance provided by the federal government to individuals who have lost their jobs.