When Current Production of Goods and Services in an Economy

question 25

Multiple Choice

When current production of goods and services in an economy is greater than planned aggregate expenditure,_____.

• A)inventories of goods and services will increase
• B)firms will increase production to replenish depleted inventories
• C)businesses and households will increase planned aggregate spending
• D)the price level will automatically rise to restore equilibrium in the economy
• E)leakages must equal planned injections

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Definitions:

Investing Activities

Parts of a company's cash flow statement that show the amount of money spent or received from investments in assets, securities, and other financial instruments.

Reconciling Columns

Columns used in a reconciliation process to adjust the differences between two sets of records for accuracy.

Land Costing

The total expenditure associated with acquiring land, including purchase price, closing costs, and preparation expenses.

IFRS

International Financial Reporting Standards, a set of accounting standards providing global framework for preparing financial statements.