Equilibrium GDP on the Demand Side Occurs When Total Spending

question 197

Multiple Choice

Equilibrium GDP on the demand side occurs when total spending

• A)equals total production, and inventories are zero.
• B)equals total production, and firms are unable to adjust inventories.
• C)exceeds total production, and inventories are rising.
• D)equals total production, and inventories remain at desired levels.
• E)is less than total production, and inventories are falling.

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating expenses, are subtracted from total revenue.

Break-Even Point

The point at which the amount produced or sold results in total income matching total costs, leading to neither a profit nor a loss.

Net Loss

The amount by which expenses exceed revenues over a specific period, indicating a negative financial performance.

Target Profits

The specific amount of net income a company aims to achieve within a certain time frame.