How Does a Decrease in Government Spending Affect the Aggregate

question 290

Multiple Choice

How does a decrease in government spending affect the aggregate expenditure line?

• A)It shifts the aggregate expenditure line upward.
• B)It shifts the aggregate expenditure line downward.
• C)It increases the slope of the aggregate expenditure line.
• D)It decreases the slope of the aggregate expenditure line.

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Definitions:

Taxes Payable

The amount of tax liability a company or individual owes to a tax authority but has not yet paid.

Preferred Dividends

Preferred dividends are fixed dividend payments issued to preferred shareholders, prioritized over common stock dividends.

Earnings Per Share

A financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock.

Liquidating Dividend

A type of dividend paid by a company that is returning part of the original investment back to shareholders, typically during dissolution.