If Total Intended Spending Precisely Equals GDP

question 53

Multiple Choice

If total intended spending precisely equals GDP

• A) inflation soars.
• B) consumer spending begins to decline.
• C) expected rates of return exceed interest rates.
• D) unemployment rises.
• E) GDP tends to remain unchanged.

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Definitions:

Debit

An accounting entry that increases an asset or expense or decreases a liability, equity, or revenue.

Credit

A financial term defining the ability to obtain goods or services before payment, based on the trust that payment will be made in the future.

Underapplied Overhead

A situation where the applied manufacturing overhead is less than the actual manufacturing overhead costs incurred.

Direct Materials

Raw materials that are directly traceable to the production of specific goods or products.