If the Price Level Is Fixed, Then an Increase in Government

question 39

Multiple Choice

If the price level is fixed, then an increase in government spending will lead to

• A)a larger increase in nominal GDP than in real GDP.
• B)a smaller increase in nominal GDP than in real GDP.
• C)no increase in either nominal GDP or real GDP.
• D)an increase in nominal GDP by the same amount as an increase in real GDP.

Understand the causes and effects of the Nonimportation Movement and the Townshend Duties.

Describe the role and formation of the Sons of Liberty and their impact on colonial resistance.

Analyze the arguments presented by colonial intellectuals against British taxation and their concepts of representation.

Understand the significance and outcomes of the repeal of the Stamp Act and the role nonimportation movements played.

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Definitions:

Sales Revenue

Financial income derived from transactions involving the sale of products or provision of services over an interval of time.

Gross Profit Rate

The ratio of gross profit to total sales, indicating the percentage of revenue that exceeds the cost of goods sold.

Net Income

The amount of earnings left after all expenses, including taxes and operating costs, have been subtracted from total revenue; a measure of company profitability.

Operating Expenses

These are costs associated with the day-to-day operations of a business, excluding direct production costs but including items like rent, utilities, and administrative salaries.