The Paradox of Thrift Does Not Exist in the Long

question 95

Multiple Choice

The paradox of thrift does not exist in the long run because

• A)aggregate supply has an impact on real GDP only in the short run.
• B)changes in aggregate demand have no impact on real GDP in the long run.
• C)potential output is determined by changes in the price level.
• D)not everyone increases saving in the long run.
• E)everyone increases consumption in the long run.

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Definitions:

Intangibles

Non-physical assets possessed by a business, such as patents, trademarks, and copyrights, which have value due to the rights or information they convey.

Indefinite Lives

An accounting classification for intangible assets that are not amortized because their economic benefits are expected to be realized over an unlimited or indeterminate period of time.

Internally Developed Goodwill

The unrecorded goodwill an organization develops internally through activities like brand name development, customer relations, and intellectual property, not reflected on the balance sheet because it is not acquired.

Capitalized

Refers to costs that are recorded as an asset on the balance sheet instead of being expensed immediately, in anticipation of future benefit.