The Key Idea of the Aggregate Expenditure Model Is That

question 71

Multiple Choice

The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by

• A)investment spending.
• B)export spending.
• C)government spending.
• D)the level of aggregate expenditure.
• E)household savings.

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Definitions:

Administration Expenses

Expenses related to the general operation of a business, including executive salaries, HR, and IT, not directly tied to the production or selling of goods/services.

Operating Expense

Expenses that a business incurs through its normal business operations, often excluding the cost of goods sold, financing costs, and taxes.

Income Statement

A document presenting a business's income and outgoings within a set timeframe, leading to a declaration of either profit or loss.

Ending Capital

Beginning Capital + Additional Investments + Net Income – Withdrawals = Ending Capital. Or: Beginning Capital + Additional Investments – Net Loss – Withdrawals = Ending Capital.