Equilibrium Expenditure Is Defined as the Level of Aggregate Expenditure

question 141

Multiple Choice

Equilibrium expenditure is defined as the level of aggregate expenditure where

• A) actual aggregate expenditure equals real GDP.
• B) total inventories equal zero.
• C) aggregate planned expenditure equals real GDP.
• D) spending equals output.

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Definitions:

Equity Method

The Equity Method is an accounting technique used by firms to assess the profits earned through their investments in other companies, recording these profits as income from the investment.

Noncontrolling Interest

An equity interest in a subsidiary held by investors other than the parent company, reflecting a share of ownership not providing control.

Goodwill

A non-tangible asset formed during the acquisition of a company for a sum greater than the fair value of its net assets that can be identified.

Equity Method

An accounting technique used to record investments in other companies, where the investment is shown as an asset and changes in the investment's value are reflected in profits or losses.