Assume There Is a Decrease in Government Purchases and Exports

question 95

Multiple Choice

Assume there is a decrease in government purchases and exports.Currently there is a recessionary gap,which implies that

• A)Inventories are accumulating.
• B)Inventories are being depleted.
• C)Desired spending is greater than output.
• D)Investment is greater than saving.

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Definitions:

Future Payments

Obligations or amounts of money that are required to be paid at a future date, often relating to loans, financing arrangements, or deferred payment agreements.

Investment Decisions

The process of choosing which assets or projects to invest in, with the aim of maximizing returns or value over time.

Uncertainty

A condition characterized by a lack of comprehensive information, making it unfeasible to precisely portray the current situation, predict future events, or identify multiple potential results.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a relevant resource or factor of production.