Using the Aggregate Expenditures Model, Which of the Following Occurs

question 51

Multiple Choice

Using the aggregate expenditures model, which of the following occurs if aggregate expenditures exceed real GDP?
I. The economy will expand causing an increase in employment.
II. The economy will experience an inflationary gap.
III. The price level will rise.
IV. Actual investment will be less than planned investment.

• A) I, II, and IV
• B) I, III, and IV
• C) I and IV
• D) I, II, III, and IV

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Definitions:

Oscilloscope

An electronic test instrument that visually displays varying signal voltages, often used for observing the change of an electrical signal over time.

MACRS Tables

Depreciation schedules provided by the Modified Accelerated Cost Recovery System used in the United States for determining the depreciation of assets for tax purposes.

Depreciation Expense

The portion of the cost of a fixed asset that is considered to be consumed or used up in each accounting period, reflecting the decrease in the asset's value over time.

Equipment

Refers to tangible assets used in the operation or production process of a business, such as machinery, tools, and vehicles.