Use the Following to Answer Questions

question 54

Multiple Choice

Use the following to answer questions:
-(Figure: Shift of the Aggregate Demand Curve) Refer to Figure: Shift of the Aggregate Demand Curve.A movement from point C on AD₂ to point A on AD₁ may have been the result of:

• A) an increase in investment spending following optimistic GDP forecasts.
• B) a decrease in investment spending following pessimistic GDP forecasts.
• C) decreases in the taxes paid by businesses.
• D) lower interest rates.

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Definitions:

Adjusting Entry

An accounting entry made in the books at the end of an accounting period to allocate income and expenditure to the correct period.

General Ledger

A complete record of all financial transactions over the life of a company, used to compile financial statements.

Accounting Cycle

The complete process of collecting, recording, and processing financial transactions of a company, from when the transactions occur, to their representation in the financial statements.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made, used to prepare financial statements.