In a Simple Model of the Economy with Demand- Determined

question 27

Multiple Choice

In a simple model of the economy with demand- determined output, the equilibrium level of national income is at an income

• A)to the left of the point where the AE curve intersects the 45- degree line.
• B)to the right of the point where the AE curve intersects the 45- degree line.
• C)where aggregate desired expenditure equals the value of total output.
• D)where saving equals consumption.
• E)where aggregate desired expenditure equals consumption.

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Definitions:

Goods Sold

The total quantity of products a company has sold during a particular period; it is closely related to "cost of goods sold" but focuses on the volume rather than the cost.

Work in Process

Inventory items that are partially completed, residing between raw material and finished goods stages in the production process.

Underapplied

Refers to the condition where the actual manufacturing overhead costs exceed the applied manufacturing overhead costs in accounting.

Overapplied

A condition in cost accounting where the allocated overhead for a period exceeds the actual overhead expenses incurred.