Solve the Problem. -An Accountant Tabulated a Firm's Profits for Four Recent Years

question 152

Multiple Choice

Solve the problem.
-An accountant tabulated a firm's profits for four recent years in the following table: The accountant then fit both a linear graph and an exponential curve (seen below) to the data, in order to estimate future profits. Use the linear graph to estimate the profits in the year 2001.

• A) About $500,000
• B) About $700,000
• C) About $800,000
• D) About $900,000

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Definitions:

Federal Deficit

The amount by which the government's total budget outlays exceed its total receipts for a fiscal year.

Discretionary Fiscal Policy

Government policy involving deliberate manipulation of government spending and taxes to influence the economy based on current economic conditions.

Aggregate Demand

Aggregate demand is the total demand for all goods and services within an economy at a given overall price level and in a given time period.

Multiplier Effect

The phenomenon where an initial change in spending leads to a greater overall change in income and output in the economy.