If AE < Y, Which of the Following Will NOT

question 7

Multiple Choice

If AE < Y, which of the following will NOT occur?

• A)inventories will decline
• B)actual investment will be more than planned investment
• C)employment will decline
• D)GDP will decline

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Definitions:

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, broken down into operating, investing, and financing activities.

Financing Activities

Transactions and events where cash is obtained from or repaid to investors and creditors excluding suppliers, which affect a company's equity or borrowings.

Cash Payments

Outflows of cash to settle obligations or purchase goods and services, as documented in the cash flow statement.

Indirect Method

A approach used in cash flow statements to adjust net income for the effects of non-cash transactions and changes in working capital.