Everything Else Held Constant,a Decrease in Government Spending ________ Aggregate

question 53

Multiple Choice

Everything else held constant,a decrease in government spending ________ aggregate ________.

• A)increases;demand
• B)decreases;demand
• C)decreases;supply
• D)increases;supply

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Definitions:

Compensating Balances

Minimum balance requirements imposed by financial institutions on certain accounts, which borrowers must maintain to compensate for the lower interest rate or fees on loans.

Speculative Opportunities

Investment options that carry a high risk of loss but also offer the potential for high rewards.

Accounts Receivable

The outstanding invoices a company has or the money the customers owe to the company for goods or services delivered.

Pledging

The act of using an asset as collateral to secure a loan, without transferring ownership of the asset.