When an Economy's Production Capacity Is Expanding

question 87

Multiple Choice

When an economy's production capacity is expanding,

• A) nominal GDP, but not necessarily real GDP, is rising.
• B) net exports is always a positive amount.
• C) DI exceeds PI.
• D) gross domestic investment exceeds depreciation.

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Definitions:

Initial Investments

The upfront expenses incurred when starting a new project, business, or investment.

Income Taxes

Taxes levied by governments on the income generated by businesses or individuals within their jurisdiction.

Income Tax Expense

The cost of taxes a company must pay based on its earnings, which can affect its net income and financial statements.

Income Tax Rate

The fraction of income that a business or individual must pay as tax.