The Main Components of Spending, Which Can Cause Changes in Aggregate

question 55

Multiple Choice

The main components of spending, which can cause changes in aggregate demand, are:

• A)​consumption, investment, government purchases, and net exports.
• B)​consumption, investment, government purchases, and imports.
• C)​investment, savings, replacement of depreciated equipment, and spending.
• D)​consumption, savings, government purchases, and exports.

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Definitions:

Average Variable Cost

The total variable costs divided by the quantity of output produced; it varies with production levels.

Average Total Cost

The total cost of production divided by the total quantity produced; a measure of per-unit production cost.

Economic Loss

A situation where the costs of producing a good or service exceed the revenue gained from selling it, resulting in financial loss.

Economic Loss

A situation where the total costs of a business or activity exceed the total revenues, indicating a negative financial performance.