Which Component of Aggregate Expenditure Is Affected When Net Taxes

question 72

Multiple Choice

Which component of aggregate expenditure is affected when net taxes are cut?

• A)net exports; they increase
• B)government purchases; they fall
• C)government purchases; they rise
• D)consumption; it falls
• E)consumption; it rises

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Definitions:

Balance Sheet

An accounting document showing the worth of a company's assets, debts, and owner's equity on a particular date.

Asset

Resources owned by a business that have economic value and can provide future benefits.

Liability

Financial obligations or debts that a company owes to others, recorded on the balance sheet.

Prepaid Rent

An expense that has been paid in advance, recorded as an asset on the balance sheet, and allocated over the period the payment covers.