If Aggregate Expenditures Equal $7,600 and Aggregate Income Equals $8,000

question 263

Multiple Choice

If aggregate expenditures equal $7,600 and aggregate income equals $8,000, businesses will produce

• A) more, raising both employment and income.
• B) less, lowering both employment and income.
• C) more, raising employment and lowering income.
• D) less, lowering employment and raising income.

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Definitions:

Profit-Maximizing Output

The level of production at which a company can achieve the maximum difference between total revenue and total costs, leading to the highest possible profit.

Market Price

The present cost at which a product or service is available for purchase or sale in the market.

Economic Profit

The total revenue of a business minus its explicit and implicit costs; represents additional wealth created by a company over and above its costs.

Total Revenue

The overall amount of money generated from the sale of goods or services.