Which of the Following Best Explains What Will Happen If

question 22

Multiple Choice

Which of the following best explains what will happen if the government purchases share of GDP falls?

• A)The net export share of GDP will fall with it.
• B)The consumption share of GDP will fall with it.
• C)The investment, consumption, and/or net export share of GDP will rise.
• D)The investment share of GDP will fall with it.
• E)It is not clear whether any of the other shares will change since we don't know what happens to GDP.

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Definitions:

Production Costs

The total expenses incurred in the process of producing or manufacturing goods or services.

Inputs

Resources such as raw materials, labor, and capital used in the production process to create goods or services.

Total Fixed Costs

The total of all expenses that do not change, irrespective of the amount of production or the level of business operations.

Workers

Workers refer to individuals engaged in any form of employment or labor, contributing their skills and efforts in exchange for compensation.