Which of the Following Will Cause an Increase in Current

question 14

Multiple Choice

Which of the following will cause an increase in current consumption?

• A)an increase in current disposable income
• B)an increase in financial wealth
• C)an increase in human wealth
• D)all of the above
• E) both B and C

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Definitions:

Expansionary Gap

A condition in which the actual output of an economy surpasses the level of output at full employment, commonly resulting in inflation.

Real GDP

Gross Domestic Product adjusted for inflation, reflecting the value of all goods and services produced by an economy in a given year in real terms.

Nominal GDP

The total market value of all goods and services produced within a country’s borders in a given period without adjusting for inflation.

Short Run

In economics, the short run is a period in which at least one input, like equipment or labor, is fixed and cannot be changed, influencing decision-making and production levels.