An Increase in the Price Level in the United States

question 295

Multiple Choice

An increase in the price level in the United States will have what effect on the aggregate expenditure line?

• A)Aggregate expenditure will shift downward.
• B)Aggregate expenditure will become steeper.
• C)Aggregate expenditure will shift upward.
• D)Aggregate expenditure will not be affected by an increase in the price level in the United States.

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Definitions:

Form 940

An IRS form used by employers to report their annual Federal Unemployment Tax Act (FUTA) tax.

Form 941

A federal tax form used by employers to report quarterly federal income tax withheld from employees' paychecks and FICA taxes.

FICA

The Federal Insurance Contributions Act tax, which funds Social Security and Medicare, requiring both employer and employee contributions.

Form 941

A quarterly federal tax form filed by employers to report income taxes, social security tax, or Medicare tax withheld from employees' paychecks.