The Figure Given Below Shows the Income-Expenditure Model

question 127

Multiple Choice

The figure given below shows the income-expenditure model.Which of the following best describes the situation at point B?

• A)Consumption expenditure exceeds disposable income
• B)Real GDP exceeds aggregate expenditure
• C)Aggregate expenditure is exactly equal to real GDP
• D)Aggregate expenditure exceeds real GDP
• E)Producers experience an unexpected accumulation of inventory

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Definitions:

Line Item

A specific and individual entry recorded in a financial statement or budget that represents income, expense, asset, or liability.

Closing Inventories

The total value of goods available for sale at the end of an accounting period, recorded on the balance sheet.

Non-Controlling Interests

The portion of equity in a subsidiary not attributable directly or indirectly to the parent company, sometimes referred to as minority interest.

Retained Earnings

Profits that a company retains for reinvestment in its operations, rather than distributing to shareholders as dividends.