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Exhibit 14A-3  Macro AD-AS Model in Exhibit 14A-3, the Level

question 45

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Exhibit 14A-3  Macro AD-AS Model Exhibit 14A-3  Macro AD-AS Model   In Exhibit 14A-3, the level of real GDP associated with Y<sub>1</sub>: A)  is equal to potential real GDP. B)  is an inflationary gap real GDP. C)  is a long-run equilibrium. D)  is caused by flexible wages and prices. In Exhibit 14A-3, the level of real GDP associated with Y1:

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Definitions:

Compensation Tax

Taxes applied on income, especially income generated from work or compensation for services.

Labor Department

A government body responsible for overseeing employment laws, workplace safety, and labor statistics.

Unemployment Insurance

A government-provided insurance that offers temporary financial assistance to workers who have lost their jobs through no fault of their own.

Vacation Leave

A period of time an employee is allowed to be away from work for personal reasons, travel, or rest, usually while still being paid.

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