Which of the Following Statements Is True

question 127

Multiple Choice

Which of the following statements is true?

• A)Most conditional forecasts assume that a change in government purchases has no effect on the other spending components of real GDP.
• B)Only consumption spending is affected by changes in government purchases.
• C)A change in government purchases has no effect on the other spending components of real GDP.
• D)Consumption, investment, and net export spending are all likely to change as a result of a change in government purchases.
• E)An increase in government purchases by $10 million will cause real GDP to increase by exactly $10 million.

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Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the overall value of the shares remains the same.

Common Stock Account

An equity account representing the ownership interest of common shareholders in a company.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders.

Share Split

A business move where a company splits its current shares into additional ones to increase the shares' marketability.