An Inflationary Spiral Can Emerge When

question 52

Multiple Choice

An inflationary spiral can emerge when

• A)Desired spending at full employment falls short of full-employment output.
• B)An increase in investment exceeds available savings.
• C)Actual investment equals desired investment.
• D)Desired leakages exceed desired injections.

---

Definitions:

Operating Activities

Business actions directly related to producing and delivering goods and services, which are reflected in the company's cash flow.

Investing Activities

Financial actions that involve the purchase and sale of long-term assets and other investments not considered to be cash equivalents.

Financing Activities

Transactions that involve raising capital or repaying funds, including issuing shares, borrowing, or repaying debt.

Financial Statement Users

Individuals or groups, such as investors, creditors, and regulatory agencies, who analyze financial statements to make informed decisions.