Use the Following to Answer Questions

question 267

Multiple Choice

Use the following to answer questions:
-(Figure: Classical versus Keynesian Macroeconomics) Refer to Figure: Classical versus Keynesian Macroeconomics.According to the Keynesian view,if this economy shifts from AD₁ to AD₂ because of a large decline in investment spending by businesses,the price level will _____,and real GDP will _____.

• A) increase;decrease
• B) not change;increase
• C) increase;not change
• D) decrease;decrease

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Definitions:

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for the changes in balance sheet accounts to arrive at the cash flow from operating activities.

Cash Flow Statement

A financial report summarizing the total cash income from a company's operational activities and external funding, along with the expenditure on business operations and investments within a specific timeframe.

Operating Activities

Activities that relate to the core business operations of a company, including revenue and expense transactions.

Direct Method

A cash flow statement preparation approach that lists major classes of gross cash receipts and payments.