In the Aggregate Demand and Aggregate Supply Model,which of the Following

question 88

Multiple Choice

In the aggregate demand and aggregate supply model,which of the following pairs of simultaneous events causes a decrease in output and employment?

• A)lower demand and lower supply
• B)lower demand and higher supply
• C)higher demand and higher supply
• D)higher demand and lower supply

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Definitions:

Baseball Hat

A type of soft cap with a rounded crown and a stiff bill projecting in front.

Tax

A mandatory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Marginal Tax Rate

The amount of tax paid on an additional dollar of income, which is typically a percentage that increases as income rises.

Horizontal Equity

The principle of tax fairness that states individuals with similar income and ability to pay should be taxed at the same rate.