A Decrease in Government Spending Will Cause

question 69

Multiple Choice

A decrease in government spending will cause

• A)AD to increase (move to the right).
• B)AD to decrease (move to the left).
• C)AS to increase (move to down and to the right).
• D)AS to decrease (move to up and to the left).

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Definitions:

Accounts Payable

An accounting entry representing a company's obligation to pay off a short-term debt to its creditors or suppliers.

Correcting Entry

An accounting entry made to correct any erroneous or previously misunderstood transactions recorded in the financial statements.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal to ensure the accounting system's mathematical correctness.

Errors

Errors are mistakes or inaccuracies that occur in financial statements or other business documents, often necessitating corrections.