Suppose the Expenditure Line Is Given by the Equation E

question 51

Multiple Choice

Suppose the expenditure line is given by the equation E = 800 + .75Y, and output is equal to 3,000. Which of the following is true?

• A)There is an incentive for firms to increase output.
• B)Spending is less than income.
• C)Spending is equal to income.
• D)The economy is in equilibrium.
• E)There is too much output.

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Definitions:

Partnership

A sanctioned business setup where a group of individuals co-manage the operation and share the resulting income.

Legal Entity

A legally recognized organization or individual that has rights, responsibilities, and can enter into contracts.

Owners

Individuals or entities that possess legal rights and claims to the assets of a business.

Monthly Salary Allowance

A fixed amount of money or compensations given on a monthly basis, often excluding any bonuses or additional pay.