The Slope of the Aggregate Expenditure Curve Increases When the Marginal

question 78

Multiple Choice

The slope of the aggregate expenditure curve increases when the marginal propensity to consume___________ or the marginal propensity to import ___________ .

• A) increases; increases
• B) increases; decreases
• C) decreases; decreases
• D) decreases; increases

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Definitions:

Earliest Inventory Purchase Costs

This refers to the cost associated with purchasing inventory items first in the order of acquisition, relevant in accounting methods like FIFO (First In, First Out).

Ending Inventory

The final value of goods available for sale at the end of an accounting period.

Lower of Cost

A method of inventory valuation where the inventory items are recorded at the lower of their original cost or the market value at the time of the financial statement preparation.

Net Realizable Value

The estimated selling price of goods, minus the cost of their sale or completion.