Figure 16-2

question 111

Multiple Choice

Figure 16-2. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs.

-Refer to Figure 16-2. If the graphs apply to an economy such as the U.S. economy, then the slope of the AD curve is primarily attributable to the

• A) wealth effect.
• B) interest-rate effect.
• C) exchange-rate effect.
• D) Fisher effect.

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Definitions:

Income Tax Return

The document filed with a tax authority reporting income, expenses, and other tax-related information to determine tax liability or refund eligibility.

Corporation

A corporation is a legal entity that is separate and distinct from its owners, which can enter into contracts, own assets, and is subject to taxation.

Subchapter S Corporation

A type of corporation designed for small businesses that allows income to be passed through to shareholders and taxed at individual rates, avoiding double taxation.

Net Income

The amount of revenue that remains after deducting all expenses, taxes, and costs from the total revenue of a business or individual.