Which of the Following Most Accurately Describes the Behavior of the U.S

question 29

Multiple Choice

Which of the following most accurately describes the behavior of the U.S. economy during the 2001 recession?

• A)Aggregate demand fell as business investment declined while aggregate supply rose as a result of continued productivity growth.
• B)Aggregate demand fell primarily as a result of reduced consumption while aggregate supply increased due to continued growth in productivity.
• C)Aggregate demand fell due to a reduction in business investment while aggregate supply declined due to a reduction in productivity.
• D)Aggregate demand fell due to the bursting of the housing bubble while aggregate supply fell due to slower productivity growth.

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Definitions:

Unearned Revenue

Money received by a business for services or products yet to be delivered or provided, recognized as a liability on the balance sheet.

Ledger

A comprehensive set of accounts that records all financial transactions of a business, categorized by type.

Normal Balances

The side (debit or credit) on which increases to an account are recorded, depending on the type of account.

Total Assets

The sum of all assets owned by a company, reflected on the balance sheet, representing both current and non-current assets.