In the Aggregate Demand/aggregate Supply Model,an Economy Operating Below Its

question 121

Multiple Choice

In the aggregate demand/aggregate supply model,an economy operating below its long-run potential capacity will experience

• A)falling real wages and resource prices that will increase SRAS,moving the economy back toward full employment.
• B)rising interest rates that will increase SRAS,moving the economy back toward full employment.
• C)inflation that will stimulate additional spending and thereby restore full employment.
• D)a prolonged economic depression unless consumer optimism is increased.

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Definitions:

Mortality Table

A mortality table, or life table, is a statistical chart used in insurance to give the probability of death for people at different ages, helping in the assessment of risk.

Social Security Taxes

Taxes levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Tax Refund

A tax refund is the return of excess taxes paid by an individual or business to the government, usually received after the annual tax return is processed.

Whole Life Insurance

A type of insurance that combines a life insurance policy with an investment feature; policyholders pay a premium that is divided between the insurance portion and the investment portion.