When Real Output Decreases, Planned Aggregate Expenditures Decrease Because

question 114

Multiple Choice

When real output decreases, planned aggregate expenditures decrease because:

• A)autonomous expenditures increase.
• B)autonomous expenditures decrease.
• C)induced expenditures increase.
• D)induced expenditures decrease.

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Definitions:

EBITDA Coverage

A ratio that measures a company’s ability to pay off its operational and debt-related expenses with its earnings before interest, taxes, depreciation, and amortization.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Depreciation

The systematic reduction in the recorded cost of a fixed asset over its useful life.

Quick Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets; also known as the acid-test ratio.