In the Aggregate Expenditure Model, Which of the Following Variables

question 94

Multiple Choice

In the aggregate expenditure model, which of the following variables is assumed to be independent of real GDP?

• A) Profit
• B) Saving
• C) Investment
• D) Consumption

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Definitions:

Capital Gains

The profit realized from the sale of assets like stocks, bonds, or real estate when the sale price exceeds the purchase price.

Dividend Yield

The annual dividends a firm distributes, expressed as a ratio of its current stock price.

Taxable Income

The portion of an individual's or corporation's income used as the basis for calculating tax owed to the government, after all allowable deductions or exemptions.

Preferred Stock

Preferred stock is a class of shares that typically provides a fixed dividend and has priority over common stock in the event of a liquidation, but generally does not carry voting rights.