Which of the Following Statements Represents a Correct and Sequentially

question 138

Multiple Choice

Which of the following statements represents a correct and sequentially accurate economic explanation?

• A) If consumption falls,total expenditures on goods and services rises,and the AD curve shifts leftward.
• B) If investment increases,total expenditures on goods and services falls,and the AD curve shifts leftward.
• C) If net exports rise,total expenditures on goods and services rises,and the AD curve shifts rightward.
• D) If consumption falls,total expenditures on goods and services falls,and the AD curve shifts leftward.
• E) c and d

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Definitions:

Value Added

The increase in worth of a product or service as a result of a particular process, often characterized by the difference between the price of the finished product and the cost of the inputs involved in making it.

Raw Materials

Basic materials extracted from natural resources or produced through agriculture, which are used in the production of goods and services.

Injection

Any spending other than by households or any income other than from resource earnings; includes investment, government purchases, exports, and transfer payments.

Circular Flow

An economic model that illustrates the continuous movement of goods, services, and money between producers and consumers in an economy.