If a Decrease in Net Taxes in the United States

question 127

Multiple Choice

If a decrease in net taxes in the United States resulted in a very large increase in aggregate output and a very small increase in the price level, then the U.S. economy must have been

• A) on the very steep part of the short-run aggregate supply curve.
• B) on the very flat part of the short-run aggregate supply curve.
• C) on the very steep part of the short-run aggregate demand curve.
• D) on the very flat part of the short-run aggregate demand curve.

---

Definitions:

Social Contract

A theoretical framework suggesting an implicit agreement among members of a society to cooperate for social benefits, such as sacrificing some individual freedom for state protection.

BATNA

Best Alternative To a Negotiated Agreement; the most advantageous alternative course of action a party can take if negotiations fail.

Industrywide Bargaining

The process of negotiating labor contracts that cover all the workers in a particular industry, rather than just those in a single company or location.

Steel Workers

Individuals engaged in the production and fabrication of steel, often represented by labor unions advocating for their rights and better working conditions.