The Total Expenditure in an Economy Is the Aggregate of Spending

question 23

Multiple Choice

The total expenditure in an economy is the aggregate of spending on _____.

• A) consumption, investment, government purchases and net exports
• B) consumption, savings, taxes and net exports
• C) savings, investments, government purchases and imports
• D) consumption, savings, government purchases and imports

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Definitions:

Current Asset

Resources anticipated to be turned into cash, disposed of, or used up within a period of one year or the duration of the business's operational cycle, depending on which timeframe extends further.

Current Liability

A financial obligation that is due within one year or within the normal operating cycle of a business, which typically includes accounts payable, short-term loans, and accrued liabilities.

Reversing Entry

An accounting technique used to simplify record-keeping, where an entry made in one accounting period is reversed in the next period to allow for straightforward transaction recording.

Adjusting Journal Entry

A journal entry made at the end of an accounting period to record any unrecorded income or expenses for that period, ensuring that financial statements adhere to the accrual basis of accounting.