Suppose There Has Been an Increase in Investment

question 15

Multiple Choice

Suppose there has been an increase in investment.As a result,real GDP will ________ in the short run,and ________ in the long run.

• A)increase; increases further
• B)increase; decrease to its initial value
• C)decrease; decrease further
• D)decrease; increase to its initial level

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Definitions:

Depreciation Expense

The methodical distribution of the expense of a physical asset over its estimated life span.

Prepaid Expenses

Payments made for goods or services to be received in the future; recognized as assets on the balance sheet until the benefit of the goods or services is realized.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded in the company's financial statements.

Operating Expenses

Operating Expenses are expenditures that a business incurs through its normal business operations, such as salaries, rent, utilities, and equipment depreciation.