Which of the Following Claims Concerning the Importance of Effects

question 183

Multiple Choice

Which of the following claims concerning the importance of effects that explain the slope of the U.S.aggregate-demand curve is correct?

• A)The exchange-rate effect is relatively small because exports and imports are a small part of real GDP.
• B)The interest-rate effect is relatively small because investment spending is not very responsive to interest rate changes.
• C)The wealth effect is relatively large because money holdings are a significant portion of most households' wealth.
• D)None of the above is correct.

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Definitions:

Graduated Income Tax

A tax system where the tax rate increases as the taxable amount increases, imposing higher rates on higher income earners.

Senators

Members of the upper chamber of a bicameral legislature, particularly in the United States, elected to represent their states in federal legislative decisions.

Progressive Era

A period of widespread social activism and political reform across the United States, from the 1890s to the 1920s, aiming to address issues caused by industrialization, urbanization, and corruption.

Female Emancipation

The process of granting women freedom or rights, particularly those that were previously restricted or limited, such as the right to vote or work.