If Aggregate Income Equals Aggregate Expenditure,which of the Following Will

question 164

Multiple Choice

If aggregate income equals aggregate expenditure,which of the following will not be true?

• A)Leakages from the circular flow must equal injections.
• B)Consumption plus investment plus government spending plus net exports must equal disposable income plus net taxes.
• C)Saving must equal investment.
• D)Saving plus net taxes and imports must equal investment plus government purchases and exports.
• E)Saving must equal investment if the government's budget is balanced and exports equal imports.

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Definitions:

Direct Materials

The cost of raw materials and components used directly in the production of goods.

Indirect Materials

Materials used in the production process that cannot be directly traced to the final product, such as lubricants and cleaning supplies, and are classified as overhead costs.

Manufacturing Overhead

Includes all manufacturing costs except direct materials and direct labor, covering expenses like utilities, depreciation, and equipment maintenance in a production facility.

Manufacturing Overhead

All indirect factory-related costs incurred while producing a product, excluding direct materials and direct labor.