If the Government Were to Decrease Its Spending, It Would

question 76

Multiple Choice

If the government were to decrease its spending, it would expect aggregate demand to:

• A) fall, and thus GDP to fall.
• B) rise, and thus GDP to fall.
• C) fall, and thus GDP to rise.
• D) rise, and thus GDP to rise.

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Definitions:

Shareholder Return

The total earnings a shareholder receives from an investment, including dividends and capital gains.

Return On Assets

A financial ratio that measures how efficiently a company uses its assets to generate profit.

Nonoperating Investments

Investments made by a company that are not related to its primary business operations, often including stocks, bonds, or real estate.

Family Investment Funds

Private financial pools contributed by family members to invest in various ventures or securities.