Which of the Following Would Not Be Included in Aggregate

question 451

Multiple Choice

Which of the following would not be included in aggregate demand?

• A)additions of newly produced goods to inventory
• B)purchases of U.S. services by foreigners
• C)the purchase of newly produced capital goods
• D)government transfer payments such as Social Security payments

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Definitions:

Economic Profit

The disparity measure in between overall returns and full expenses, including both exposed and indirect costs.

Market Supply

The total amount of a product that sellers are willing and able to sell across all relevant price levels within a given market.

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust fully to market changes.

Long-run Equilibrium

The condition in which, considering full adjustments in the market, the quantity supplied equals the quantity demanded at the prevailing market price.