Aggregate Demand Will Decrease When There Are

question 132

Multiple Choice

Aggregate demand will decrease when there are

• A)decreases in government spending.
• B)increases in consumer and business confidence.
• C)increases in inflationary expectations.
• D)decreases in the price level.
• E)declines in the demand for money.

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Definitions:

Working Capital

The measure of a company's liquidity, efficiency, and its short-term financial health, calculated as current assets minus current liabilities.

Externalities

Costs or benefits that affect parties who did not choose to incur that cost or benefit, often related to environmental, public health, or economic activities.

Net Present Value (NPV)

A calculation used to assess the profitability of an investment, measuring the difference between the present value of its cash inflows and outflows.

Internal Rate of Return (IRR)

The rate of growth a project is expected to generate, calculated as the discount rate that makes the net present value (NPV) of all cash flows equal to zero.