When Aggregate Demand Exceeds Current Output, Keynesian Analysis Indicates That

question 63

Multiple Choice

When aggregate demand exceeds current output, Keynesian analysis indicates that

• A) unplanned inventory accumulation will cause output to rise.
• B) unplanned inventory accumulation will cause output to fall.
• C) unplanned inventory reductions will cause output to rise.
• D) unplanned inventory reductions will cause output to fall.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in net profit or loss.

Net Operating Profit After Taxes (NOPAT)

A company's operating profit after adjusting for taxes, reflecting the potential cash earnings if the company had no debt.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all income and expenses except interest and income tax expenses.

Income Statement

A financial statement that shows a company's income and expenses over a specific period, culminating in net profit or loss.