If the MPS Is 1/3, a $200 Increase in Net

question 105

Multiple Choice

If the MPS is 1/3, a $200 increase in net exports will

• A) reduce real Gross Domestic Product (GDP) by $600.
• B) reduce real Gross Domestic Product (GDP) by $300.
• C) increase real Gross Domestic Product (GDP) by $300.
• D) increase real Gross Domestic Product (GDP) by $600.

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Definitions:

Cost Of Goods

The direct costs attributable to the production of the goods sold by a company, including materials and labor but excluding indirect expenses.

Beginning Inventory

The value of a company's inventory at the start of an accounting period.

Production Budget

is a financial plan that estimates the cost of production based on projected product volumes, including costs of materials, labor, and overhead.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated using inventory valuation methods such as FIFO, LIFO, or weighted average.