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:

War on Terrorism

A global campaign launched by the United States in response to the September 11, 2001 terror attacks, aiming to eliminate international terrorism.

United States

A country located in North America consisting of 50 states and known for its significant influence on global politics, economy, and culture.

Basic Question

In economics, refers to fundamental queries about how to allocate scarce resources to satisfy human wants.

Economy

The system of production, consumption, and distribution of goods and services within a geographical region.