-Refer to the Above Diagram

question 97

Multiple Choice

-Refer to the above diagram.If the full-employment level of GDP is B and aggregate expenditures are at AE₃,the:

• A) inflationary expenditure gap is ed.
• B) inflationary expenditure gap is BC.
• C) recessionary expenditure gap is eg.
• D) economy is in equilibrium,but at less than full employment.

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Definitions:

Gross Pay

The total amount of money an employee earns before any deductions are taken out such as taxes or retirement contributions.

FICA-Medicare

A federal tax in the United States deducted from workers' paychecks to fund the Medicare program, which provides health insurance to individuals who are 65 years of age or older or who meet other specific criteria.

State Unemployment Funds

Reserves maintained by individual U.S. states to provide unemployment benefits to eligible laid-off workers.

Payroll Tax

Financial obligations enforced on both employers and employees, usually measured as a portion of the compensation employers provide to their personnel.