Which of the Following Best Defines an Expansion

question 62

Multiple Choice

Which of the following best defines an expansion?

• A) Real GDP is below its potential level.
• B) Real GDP is increasing.
• C) Unemployment is unusually high.
• D) Real GDP is decreasing.
• E) Real GDP exceeds its potential level.

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Definitions:

Purchasing Supplies

The process of acquiring the goods and materials a company needs to operate.

Increases Liabilities

Refers to events or transactions that result in a rise in the amounts owed by a company, such as taking on new loans or issuing bonds.

Decreases Equity

Activities or transactions that reduce the owner's equity in a company, often through expenses, losses, or distributions to owners.

Earned Revenue

Earned revenue is income a company generates from its business activities, such as sales of goods or services, indicating work completed and value provided to customers.