What Do Investment and Government Expenditures Have in Common

question 49

Multiple Choice

What do investment and government expenditures have in common?

• A) Both represent injections to the circular flow.
• B) Both represent leakages from the circular flow.
• C) Neither is subject to the multiplier effect.
• D) Both represent a decline in indebtedness.

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Definitions:

Vertical Integration

A strategy where a firm expands its operations into different stages of production or distribution within the same industry.

Strategic Alliance

A formal pact made between multiple parties to achieve common aims, notwithstanding their continuing independence as organizations.

Acquisition

The process of obtaining control of another company by purchasing it or merging with it.

Achieving Legitimacy

The process of gaining acceptance, credibility, and recognition within a particular context or among a specific audience.