Article Summary Gains in Consumer and Business Spending Gave GDP a Bigger

question 263

Multiple Choice

Article Summary
Gains in consumer and business spending gave GDP a bigger boost than was forecast in the third quarter of 2017, growing at an annualized rate of 3 percent. Motor vehicle sales following the hurricanes that struck Texas and Florida are being credited for much of the gain in consumer spending, which grew at an annualized rate of 1.6 percent, and a steady job market, low inflation, and low interest rates are expected to sustain consumer spending. Residential investment remained weak, but nonresidential investment increased 3.9 percent. Government spending declined slightly, and after-tax income increased by 0.6 percent after being adjusted for inflation.

-Refer to the Article Summary. The increase in GDP discussed in the article summary was due in part to increases in nonresidential investment. Increases in nonresidential investment will cause a(n) ________ the aggregate expenditure curve.

• A) movement up along
• B) movement down along
• C) downward shift of
• D) upward shift of

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Definitions:

Quick Ratio

A liquidity measure that indicates a company's ability to pay its current liabilities without relying on the sale of inventory, calculated as (current assets - inventory) / current liabilities.

Marketable Securities

Financial instruments that can be easily bought or sold on public stock exchanges or other financial markets.

Accounts Receivable

Amounts due from customers for goods or services provided by a firm, yet to be paid.

Common-sized Income Statement

An income statement in which each line item is expressed as a percentage of sales revenue, allowing for easy comparison across periods or companies by standardizing the scale.