In the Keynesian-Cross Model, Actual Expenditures Differ from Planned Expenditures

question 108

Multiple Choice

In the Keynesian-cross model, actual expenditures differ from planned expenditures by the amount of:

• A) liquidity preference.
• B) the government-purchases multiplier.
• C) unplanned inventory investment.
• D) real money balances.

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Definitions:

Balance Sheet Equation

An accounting formula representing the relationship between assets, liabilities, and owner's equity (Assets = Liabilities + Owner's Equity).

Retained Earnings

The portion of net income not distributed as dividends to shareholders, but retained by the company to reinvest in its business or to pay debt.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, a key indicator of financial health.

Net Cash Flow

The amount of cash generated or lost by a company in a given period, considering cash inflows and outflows from operating, investing, and financing activities.