Changes in Business Inventories Are

question 76

Multiple Choice

Changes in business inventories are:

• A)classified as consumption expenditures.
• B)classified as investment expenditures.
• C)classified as government purchases.
• D)excluded from GDP.

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Definitions:

Nominal Wages

The amount of money received by an employee before any deductions and not adjusted for inflation; the face value of wages.

Potential Output

The highest level of real GDP that can be sustained over the long term without increasing inflation, reflecting the economy's maximum productive capacity.

Actual Output

The real quantity of goods and services produced by an economy, as opposed to its potential or desired output.

Long-Run Equilibrium

A state in economics where all factors of production and outputs are fully optimized, with no external pressures causing shifts.