If Full-Employment Output Exceeds Equilibrium Output,greater Deficit Spending Will Result

question 98

Multiple Choice

If full-employment output exceeds equilibrium output,greater deficit spending will result in a

• A)Smaller recessionary gap.
• B)Smaller inflationary gap.
• C)Larger recessionary gap.
• D)None of the choices are correct.

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Definitions:

Return-On-Equity Ratio

A financial ratio that measures a company's ability to generate profits from its shareholders' equity.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in a profit or loss.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholder's equity at a specific point in time.

Investing Activities

Investing activities involve the purchase and sale of long-term assets and other investments, not considered as cash equivalents by a company.