Fiscal Policy Affects Which Two Components of Aggregate Demand Either

question 120

Multiple Choice

Fiscal policy affects which two components of aggregate demand either directly or indirectly?

• A) Government spending and consumption
• B) Net exports and saving
• C) Investment and net exports
• D) Consumption and investment
• E) Taxes and consumption

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Definitions:

Operating Activities

These involve the primary day-to-day activities of a business, such as sales and the purchase of goods or services, which are reflected in its cash flow.

Comparative Balance Sheet

A financial statement that presents the financial position of a company at two or more different points in time, allowing for analysis of trends in assets, liabilities, and equity.

Net Income

Net Income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Property, Plant

Assets that are used in operations and have a useful life longer than one year, such as buildings, machinery, and equipment.