Use the Following Terms for This Question: C = Consumption

question 10

Multiple Choice

Use the following terms for this question: C = consumption
I = capital investment spending
G = government spending
X = exports of goods and services
M = imports of goods and services
BOP = balance of payments
GDP = gross domestic product
NPV = net present value
INF = inflation
R = real rate of return
The static equation for the nations GDP is:

• A) GDP = C + I + G + (X + M ) × INF
• B) GDP = C + I + G + X + M
• C) GDP = C + I + G + X - M
• D) GDP = C + I + X - M + R

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Definitions:

Utility Function

A mathematical representation of how different bundles of goods or services are ranked in terms of their utility or satisfaction to a consumer.

Marginal Rate of Substitution

The rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility.

Good X

A symbolic term often used in economics to represent any generic commodity or product under consideration for analysis.

Units

Measurements or quantities ascertained by established standards used for trading, scientific experiments, and other purposes.