Which Components of Aggregate Expenditure Change as a Result of Real

question 154

Multiple Choice

Which components of aggregate expenditure change as a result of real GDP changing?

• A) consumption expenditure and imports
• B) consumption expenditure and investment
• C) consumption expenditure, investment, and exports
• D) consumption expenditure, investment, and government expenditure on goods and services
• E) consumption expenditure and government expenditure on goods and services

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Definitions:

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, where individual self-interests unintentionally benefit society.

Fairness

The quality of making judgments that are free from discrimination, dishonesty, or injustice.

Ultimatum Game

A game in economic experiments where one player proposes how to divide a sum of money with another, who can accept or decline the offer, with both getting nothing if declined.

Dictator Game

An experimental economics game that measures how fairly individuals allocate resources when they have complete control over distribution.