Suppose at Each Price Level, Autonomous Aggregate Expenditures Fall by $80

question 113

Multiple Choice

Suppose at each price level, autonomous aggregate expenditures fall by $80 billion. As a result, the aggregate expenditures curve shifts

• A) downward at each price level and results in a leftward shift in aggregate demand.
• B) upward at each price level and results in a rightward shift in aggregate demand.
• C) downward at each price level and results in a movement down along a given aggregate demand.
• D) upward at each price level and results in a movement up along a given aggregate demand.

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Definitions:

Allowance

In accounting, an estimate for future adjustments to accounts receivable, reflecting debts that might not be collectible.

Allowances for Doubtful Accounts

Allowances for doubtful accounts is a contra asset account used to estimate the portion of a company's receivables that may ultimately not be collectible.

Bad Debt Expense

Bad debt expense represents the loss that a company incurs when it is unable to collect receivables from customers who are unable to pay their debts.

Adjusting Entry

Refers to adjustments made in the books of accounts to record expenses or revenues that have occurred but are not accurately represented in financial statements.