Which of the Following Equations Represents Equilibrium in the Goods

question 20

Multiple Choice

Which of the following equations represents equilibrium in the goods market?

• A) AE = I(r)
• B) Y = AD + AS
• C) Y = S + I
• D) AE = C + I + G

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Definitions:

Nominal Accounts

Accounts that are closed at the end of each accounting period, including all income, expense, and withdrawal accounts.

Closing Process

The set of procedures undertaken at the end of an accounting period to prepare accounts for the next period, including closing temporary accounts to the permanent summary account.

Financial Statements

Consolidated documents that present the financial activities and condition of a business or individual, including the balance sheet, income statement, and cash flow statement.

Adjusted Trial Balance

A listing of all company accounts and their balances after adjustments, used to ensure that debit and credit balances are equal before generating financial statements.