On the Graph of GDP, Government Spending and Net Exports

question 90

Multiple Choice

On the graph of GDP, government spending and net exports are:

• A) horizontal lines because they are autonomous expenditures.
• B) vertical lines because the level of spending is fixed.
• C) upward sloping because they increase as GDP increases.
• D) downward sloping because they decrease as GDP increases.

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Definitions:

Inverse Demand

A representation of demand that shows how the price of a good or service can vary inversely with changes in the quantity demanded.

Typeset

The composition of text by arranging physical or digital type to make written language legible, readable, and appealing when displayed.

Marginal Cost

The financial outlay required to produce an additional unit of a product or service.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity of the good that consumers are willing to buy.