When the Economy Is Operating at the Equilibrium Level of GDP

question 414

Multiple Choice

When the economy is operating at the equilibrium level of GDP, we know that

• A) total planned real consumption expenditures equal real GDP.
• B) planned real investment spending equals real net exports of zero.
• C) total planned real expenditures equal real GDP.
• D) real net exports equal inventory changes.

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Definitions:

Wages Payable

An account that records the amounts owed to employees for work performed that have not yet been paid.

Cash Flow

The total sum of cash and cash-like assets moving in and out of a company.

Capital Stock

The total amount of a company's shares that are authorized for issuance, representing the ownership of the company.

Financing Activities

Transactions related to raising capital and repaying investors, including issuing equity, debt, and paying dividends.