Which Part of Real GDP Fluctuates Most Over the Course

question 26

Multiple Choice

Which part of real GDP fluctuates most over the course of the business cycle?

• A)consumption expenditures
• B)government expenditures
• C)investment expenditures
• D)net exports

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Definitions:

FICA Tax

Federal Insurance Contributions Act tax used to finance federal programs for old-age and disability benefits (social security) and health insurance for the aged (Medicare).

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay to their staff.

Note Payable

A written promise to pay a specific amount of money, usually with interest, by a certain date.

Borrower

An individual or entity that takes money or property from another under an agreement to return it or its equivalent at a future date.