Which Must Be True When Consumption Exceeds Income

question 102

Multiple Choice

Which must be true when consumption exceeds income?

• A)the consumption function shifts upward
• B)the consumption function shifts downward
• C)aggregate expenditures equal real GDP
• D)saving must be negative
• E)aggregate expenditures will fall

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Definitions:

Supplies Purchased

Represents the purchase of tangible goods or materials used in the production of goods or for the operation of the company.

Accrued Revenues

Accrued revenues are revenues that have been earned but not yet received in cash or recorded, representing assets on the balance sheet.

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, showing assets, liabilities, and equity.

Prepaid Advertising

An asset account that reflects the cost of advertising paid in advance, which has not yet been utilized or expired.