In the Long Run,an Increase in Government Purchases of Military

question 26

Multiple Choice

In the long run,an increase in government purchases of military equipment would cause output to ________ and the aggregate price level to ________.

• A)stay constant; fall
• B)fall; fall
• C)fall; stay constant
• D)stay constant; rise

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Definitions:

Retained Earnings

Profits that a company has reinvested in itself rather than paying out to shareholders as dividends.

Comprehensive Income

This term includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Comprehensive Income

A measure of all changes in equity of a company that result from recognized transactions and other economic events of the period other than those resulting from investments by and distributions to owners.

Unrealized Gains

Profits from investments that have increased in value but have not yet been sold for cash.