A Tax Increase That Affects Both Aggregate Demand and Potential

question 71

Multiple Choice

A tax increase that affects both aggregate demand and potential output is predicted to _____ the long-run equilibrium level of output, while inflation _____.

• A)decrease; increases
• B)increase; decreases
• C)decrease; may increase, decrease, or remain unchanged
• D)decrease; decrease

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Definitions:

Quorum

The minimum number of members required to be present at a meeting to make the proceedings of that meeting valid.

Shareholder Agreement

A contract among shareholders of a company outlining their rights, obligations, and mutual agreements regarding company operations and governance.

Duration

The length of time during which something exists or continues.

Statutory Close Corporation Supplement

Additional legal provisions or regulations applicable to a close corporation, closely held and not publicly traded, defined by statute.