If Real GDP Increases from $2,000 to $2,500 and Aggregate

question 171

Multiple Choice

If real GDP increases from $2,000 to $2,500 and aggregate expenditures increase from $1,900 to $2,200, the slope of the aggregate expenditures curve is

• A) 0.6.
• B) 0.7.
• C) 0.8.
• D) 0.9.

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Definitions:

Overhead Costs

Expenses related to the day-to-day operations of a business that are not directly tied to a specific product or service, such as rent, utilities, and office supplies.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not been sold yet.

Work In Process Inventory

Components, raw materials, and labor costs associated with partially completed goods during the manufacturing process.

Direct Labor

The wages paid to workers directly involved in the production of goods or services.