Exhibit 11-2 -Refer to the Graph in the Exhibit.Consider an Economy Characterized

question 63

Multiple Choice

Exhibit 11-2

-Refer to the graph in the exhibit.Consider an economy characterized by the aggregate expenditure line.How would a $100 increase in autonomous net taxes affect real GDP?  

• A) It would decrease real GDP by $200.
• B) It would decrease real GDP by $100.
• C) It would increase real GDP by $200.
• D) It would increase real GDP by $100.

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within a company's operating cycle.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and efficiency.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a business's operating cycle, whichever is longer.

Current Liabilities

Obligations or debts due for payment within one year.