Which of the Following Is Most Sensitive to Fluctuations in GDP

question 6

Multiple Choice

Which of the following is most sensitive to fluctuations in GDP?

• A) government purchases
• B) government nonmilitary spending
• C) transfer payments
• D) military spending
• E) interest on the national debt

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Definitions:

Inflation Level

The pace at which the average price level of goods and services ascends, diminishing the value of money.

Base Year

A specific year against which economic or financial data is measured and compared.

Chain-Weighted Index

An economic measure that accounts for changes in both prices and quantities of goods and services over time, adjusting the weightings to better reflect reality.

Laspeyres Index

A price index used to measure the change in the cost of acquiring a fixed basket of goods and services of the same type and quantity over time.