Figure 18-4 -Refer to Figure 18-4.In the Graph Above,suppose the Economy Is

question 171

Multiple Choice

Figure 18-4

-Refer to Figure 18-4.In the graph above,suppose the economy is initially at point A.The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Congress and the president?

• A)an increase in transfer payments
• B)an increase in interest rates
• C)an increase in the marginal income tax rate
• D)an open market purchase of Treasury bills

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Definitions:

Aggregate Quantity

The total amount or volume of a particular good or service produced or consumed in a given period.

Aggregate Demand Curve

A graphical representation showing the relationship between the overall price level in the economy and the total demand for goods and services at that price level.

Real Output

The total value of all goods and services produced by an economy, adjusted for inflation, representing the actual productivity.

Price Levels

A calculated average price for every good and service produced domestically.