One Consequence of an Increase in Government Spending Is That

question 45

Multiple Choice

One consequence of an increase in government spending is that

• A) autonomous consumption will increase
• B) autonomous consumption and investment spending will decrease
• C) the increase in GDP will equal the size of the amount of spending
• D) autonomous consumption and investment spending will increase
• E) investment spending will increase.

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Definitions:

Physical Inventory

An actual count of all merchandise or stock on hand, conducted periodically to ensure the accuracy of inventory records.

Net Income

The total profit of a company after all revenues and gains are added together and all expenses and losses are subtracted.

FOB Shipping Point

A term indicating that the buyer assumes responsibility for the goods once the seller ships them.

Net Income

The total earnings of a company after subtracting all costs and expenses, including taxes and interest, from its total revenues.