When Output Is Higher Than the Intersection of the Keynesian

question 11

Multiple Choice

When output is higher than the intersection of the Keynesian AE and the 45 degree line,which of the following can we can expect to happen?

• A)savings to be negative and consumption to fall
• B)inventories to rise and output to fall
• C)consumers to expect higher incomes and consumption to rise
• D)inventories to fall and output to rise

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Definitions:

Ending Balance

The final amount in an account at the end of a reporting period after all debits and credits have been accounted for.

Net Income

The remaining profit of a company after all necessary subtractions, such as taxes and expenses, from its revenue.

Net Income

A company's remaining earnings after deducting all taxes and costs from the complete revenue.

Income Splitting

A tax strategy used to transfer income from a higher-tax-rate taxpayer to a lower-tax-rate taxpayer to reduce the total tax paid.