Suppose Output Is $35 Billion,government Purchases Are $10 Billion,desired Consumption

question 7

Multiple Choice

Suppose output is $35 billion,government purchases are $10 billion,desired consumption is $15 billion,and desired investment is $6 billion.Absorption is equal to

• A)$25 billion.
• B)$31 billion.
• C)$35 billion.
• D)$39 billion.

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Definitions:

Single-Step Income Statement

A simplified income statement that summarizes revenues and expenses in a single step, without categorizing them.

Sales Revenue

Financial income derived from transactions involving the sale of products or provision of services over an interval of time.

Gross Profit Rate

The ratio of gross profit to total sales, indicating the percentage of revenue that exceeds the cost of goods sold.

Net Income

The amount of earnings left after all expenses, including taxes and operating costs, have been subtracted from total revenue; a measure of company profitability.