Nominal Consumption Expenditure Is $1,500 Billion and Real Consumption Expenditure

question 88

Multiple Choice

Nominal consumption expenditure is $1,500 billion and Real consumption expenditure is $1,200 billion.The CPIC is

• A)0.80.
• B)1.25.
• C)80.
• D)125.
• E)150.

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Definitions:

Crowding Out

A situation in economics where increased government spending reduces private sector investment or spending due to higher interest rates.

Opportunity Cost

The financial impact of bypassing the next most favorable choice in a decision.

Transfer Payments

These are payments made by the government to individuals or other entities without the government receiving any goods or services in return, such as welfare checks.

Government Budget Deficit

A situation where the government's expenditures exceed its revenues over a specified period of time, leading to borrowing or debt accumulation.