Actual Aggregate Expenditure Is

question 165

Multiple Choice

Actual aggregate expenditure is

• A) always equal to real GDP.
• B) never greater than real GDP but can be less than real GDP.
• C) never less than real GDP but can be greater than real GDP.
• D) only equal to real GDP at the equilibrium level of aggregate planned expenditure.

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Definitions:

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Discounted Cash Flow

A valuation method used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money.

Risk Adjustment

A process used in finance and insurance to modify predictions or values based on known risks or uncertainties to make them more accurate or representative.

Net Present Value

A financial metric used to assess the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows over a period of time.