According to classical macroeconomic theory, the price level, but not real GDP, are affected by changes in the

After implementation of the Single European Act, value added taxes in the EU were

A) completely harmonized. B) unchanged. C) partially harmonized with minimum and maximum permissible values set by the EU. D) cut in half in order to increase the role of corporate taxes.

Refer to the graphs below. In Graph A, a decrease in the price level from P1 to P3 will lead to:

In the graphs below, QP refers to the economy's potential output level.


A. A decrease in profits, an increase in real output, and a decrease in the unemployment rate
B. A decrease in profits, a decrease in real output, and a decrease in the unemployment rate
C. A decrease in profits, a decrease in real output, and an increase in the unemployment rate
D. An increase in profits, an increase in real output, and a decrease in the unemployment rate