When the Expenditure Level Is Above the Full Employment Level

question 87

Multiple Choice

When the expenditure level is above the full employment level of GDP, a possible consequence is

• A)falling prices.
• B)rising prices.
• C)falling disposable income.
• D)high levels of unemployment.

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Definitions:

Per-Unit Basis

A method of expressing or measuring something in terms of a single unit or a fixed amount per unit.

Marginal Tax Rate

The rate at which the next dollar of taxable income is taxed, indicating how much of an additional dollar earned will be taken in taxes.

Taxable Income

The sum of money earned by a person or a business that is used to calculate the owed tax payable to the government.

After-Tax Income

The amount of income that remains after all taxes have been deducted.