When an Economy's Production Capacity Is Expanding

question 87

Multiple Choice

When an economy's production capacity is expanding,

• A) nominal GDP, but not necessarily real GDP, is rising.
• B) net exports is always a positive amount.
• C) DI exceeds PI.
• D) gross domestic investment exceeds depreciation.

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Definitions:

FOB Shipping Point

is a shipping term indicating that the buyer assumes responsibility for the goods and the shipping costs at the point of departure from the seller's location.

Merchandise Purchases

Transactions involving the buying of goods for resale purposes, typically part of the inventory acquisition process in retail or wholesale businesses.

Trade Discount

A reduction from the list price granted by a seller to a buyer, often based on the volume of goods purchased or to promote sales.

Cash Payment

A transaction in which payment for goods or services is made in cash at the time of purchase.