The IA Line Does Not Shift in the Short Run

question 68

Multiple Choice

The IA line does not shift in the short run because

• A)real and potential GDP are not equal.
• B)potential GDP does not change.
• C)of expectations and staggered wage and price adjustment.
• D)real GDP does not change.
• E)there is no spending balance.

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Definitions:

Net Income

The total earnings of a company after deducting all expenses, taxes, and losses, indicating the company's profitability.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, including revenues, expenses, and net income or loss.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly.

Depreciation

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life.