If Firms Decide to Decrease Their Purchases of U

question 120

Multiple Choice

If firms decide to decrease their purchases of U.S.-produced goods,

• A)the decrease in investment will have no effect on U.S.income or consumption.
• B)the decrease in investment will cause U.S.income to increase, which will cause consumption to increase.
• C)the decrease in investment will cause U.S.income to decrease, which will cause consumption to decrease.
• D)real GDP will increase by the same amount that investment spending decreased.
• E)real GDP will decrease by the same amount that investment spending decreased.

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Definitions:

Prolonged Stress

Describes a state of continuous psychological strain or pressure that extends over a long period of time.

Feedback Mechanism

A process by which a system regulates itself by monitoring its own output or response to external stimuli and making adjustments accordingly.

Negative

A term often used to describe the absence of something, such as disease in medical tests, or expressing a denial or refusal.

Positive

Characterized by the presence rather than absence of distinguishing features.