Use the Figure Below to Answer the Following Question(s)

question 82

Multiple Choice

Use the figure below to answer the following question(s) . Figure 11-1
Refer to Figure 11-1.  Consider the short-run aggregate supply curve SRAS. What is the segment between a and b called?

• A) the new classical range
• B) the Keynesian range
• C) the flexible wage and price range
• D) the balanced budget range

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Definitions:

Labor Supply

The total hours that workers wish to work at a given wage rate, or the workforce available for employment.

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff, used to fund social security and other government programs.

Corporate Income Tax

A tax imposed on the net income (profit) of corporations, calculated at a corporate tax rate.