Suppose That the Share of Gove Rnment Spending Is Incre

question 69

Multiple Choice

Suppose that the share of gove rnment spending is incre a s e d. If potential GDP is unch a n ge d, wh i ch of the fo l l owing necessari ly happens in the long ru n ?

• A) The share of consumption expenditures falls by the same amount.
• B) The share of investment falls by the same amount.
• C) The share of net exports falls by the same amount.
• D) The share of consumption expenditures and investment falls by the same amount.
• E) The share of consumption expenditures, investment, and net exports falls by the same amount.

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Definitions:

Payments

Transactions involving the transfer of money in exchange for goods, services, or to fulfill a legal obligation.

Accounts Payable

Financial obligations a company owes to its suppliers or creditors for goods and services received.

Adjustments

Modifications made to improve functionality or performance, often referring to therapeutic manipulation of the spine or joints.

Single-Entry Bookkeeping System

An accounting method in which each financial transaction is recorded only once in account books; similar to a checkbook register; the journal for each transaction is recorded in one column, or on a single line, to account for either a positive or negative amount to demonstrate the receipt or disbursement of cash.