If an Economy's GDP Falls,then It Must Be the Case

question 11

Multiple Choice

If an economy's GDP falls,then it must be the case that the economy's

• A)income falls and saving rises.
• B)income and saving both fall.
• C)income falls and expenditure rises.
• D)income and expenditure both fall.

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Year 1

Refers to the first year of operation for a business or the first year of a specific reporting period.

Contra-asset

A contra-asset account is a type of asset account where its balance is a negative figure that offsets the balance of its corresponding asset account.

Liability

A financial obligation or debt owed by a company to another entity, which is expected to be settled through the transfer of assets or services.