Consider a world with two income earners and an income tax. Individual A earns $25,000 and pays $1,000 in taxes. Individual B earns $100,000 and pays $4,000 in taxes. Which of the following best classifies the income tax system in this world?

The aggregate demand curve shows that, if other factors are held constant

A) higher price levels will result in higher total planned spending. B) higher price levels will result in lower total planned spending. C) lower price levels will result in inflationary conditions. D) higher price levels will result in lower interest rates.

The quantity of real GDP supplied increases when the price level increases because

A) the quantity of money increases. B) the real wage rate rises. C) aggregate demand increases. D) investment increases. E) the real wage rate falls.