In the Keynesian-Cross Model, Actual Expenditures Differ from Planned Expenditures

question 108

Multiple Choice

In the Keynesian-cross model, actual expenditures differ from planned expenditures by the amount of:

• A) liquidity preference.
• B) the government-purchases multiplier.
• C) unplanned inventory investment.
• D) real money balances.

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Definitions:

Unit Variable Cost

The cost associated with producing one additional unit of a product, including materials, labor, and other variable expenses.

Sales Volume

Sales volume refers to the number of units of a product sold over a specific period, serving as a measure of business activity and market demand for the product.

Unit Price

The cost of a single item or unit of measure for goods or services, facilitating comparison of costs among similar items.

Fixed Costs

Costs that do not change with the level of production or sales activity, such as rent or salaries.