If Firms Decide to Decrease Their Purchases of U

question 120

Multiple Choice

If firms decide to decrease their purchases of U.S.-produced goods,

• A)the decrease in investment will have no effect on U.S.income or consumption.
• B)the decrease in investment will cause U.S.income to increase, which will cause consumption to increase.
• C)the decrease in investment will cause U.S.income to decrease, which will cause consumption to decrease.
• D)real GDP will increase by the same amount that investment spending decreased.
• E)real GDP will decrease by the same amount that investment spending decreased.

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Definitions:

Meaningful Units

Discrete pieces of information or elements that can be understood and processed as a single unit within a larger context, enhancing comprehension or learning.

Information

Data that is processed, organized, structured or presented in a given context to make it meaningful or useful.

Peg-Word System

A mnemonic technique for memorizing lists by associating items with a pre-memorized list of words or numbers.

Visually Associating

The process of forming connections or associations between visual images to facilitate remembering or understanding.