How Does Consumer Spending Affect GDP

question 71

Multiple Choice

How does consumer spending affect GDP?

• A) If spending decreases, GDP increases.
• B) If spending increases, GDP decreases.
• C) If spending increases, GDP increases.
• D) Consumer spending doesn't affect GDP.

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Definitions:

Market Demand

The total demand for a product or service in a market, summing up individual demands at each price level.

Profit-Maximizing Output

The level of production at which a company can achieve the highest possible profit, considering its cost structure and market demand.

Market Price

The current price at which a good or service can be bought or sold in a particular market, determined by supply and demand.

Total Revenue

The total income received by a company from its sales of goods or services, without any deductions.