Refer to Figure 2 Below

question 16

Multiple Choice

Refer to Figure 2 below.Which of the following statements is NOT true? Figure 2

• A)The upward shift in the expenditure line from C+I+G+(X-
• M)1 to C+I+G+(X‑
• M)₂ and consequent increase in national income would result from a reduction in interest rates.
• B)The upward shift in the expenditure line from C+I+G+(X-
• M)1 to C+I+G+(X‑
• M)₂ and consequent increase in national income would result from an increase in exports.
• C)The upward shift in the expenditure line from C+I+G+(X-
• M)1 to C+I+G+(X‑
• M)₂ and consequent increase in national income would result from a reduction in saving.
• D)The upward shift in the expenditure line from C+I+G+(X-
• M)1 to C+I+G+(X‑
• M)₂ and consequent increase in national income would result from a reduction in government expenditure.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, particularly in relation to its operating, investing, and financing activities.

Net Income

The ultimate profit of a firm calculated by subtracting all outgoings and taxation from the gross revenue.

FIFO

"First In, First Out," an inventory valuation method where items produced or acquired first are sold, used, or disposed of first.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made at specific intervals, and cost of goods sold is calculated at the end of an accounting period.