Which of the Following Statements Is True

question 60

Multiple Choice

Which of the following statements is true?

• A)The IA line describes the behavior of firms and consumers when a change in the inflation rate causes interest rates to change.
• B)The IA line identifies inflation at any given time.
• C)The IA line identifies all possible points of spending balance.
• D)The AD curve identifies the rate of inflation at any given time.
• E)The IA line identifies real GDP at any given time.

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Definitions:

Ordinary Repairs

Ordinary repairs are routine maintenance expenses undertaken to maintain the efficiency and operating condition of an asset but do not significantly extend its life.

Maintenance Costs

Expenses incurred to keep property, equipment, or machinery in efficient operating condition and repair.

Productive Asset

Assets that are used by a business to generate revenue, which can include physical property, equipment, and machinery, among other items.

Residual Value

The estimated amount that an asset is expected to realize upon the end of its useful life after all depreciation or amortization has been accounted for.