Which of the Following Would Not Be Included in Aggregate

question 451

Multiple Choice

Which of the following would not be included in aggregate demand?

• A)additions of newly produced goods to inventory
• B)purchases of U.S. services by foreigners
• C)the purchase of newly produced capital goods
• D)government transfer payments such as Social Security payments

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Definitions:

AE Curve

The AE curve represents the Aggregate Expenditure in an economy at various levels of income or output, showing the total spending (consumption, investment, government spending, and net exports) at those levels.

Deadweight Loss

A reduction in economic productivity occurring when there is no achievement of equilibrium for a good or service.

Marginal Revenue

The enhanced income derived from peddling an additional unit of a product or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service, a critical factor in economic decision-making.