According to the Classical Model, an Increase in Aggregate Demand

question 247

Multiple Choice

According to the classical model, an increase in aggregate demand would

• A) lead the economy to recession.
• B) lead the economy to a deflationary cycle.
• C) cause an adjustment to a higher price level.
• D) raise real Gross Domestic Product (GDP) but leave the price level unchanged.

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An expenditure that is subtracted from gross income to reduce the amount of income that is subject to taxation.

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The cost or price of a ticket for travel by airplane.

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The tax rate applied to both employers and employees to fund the Social Security program.