The Country of Nemedia Does Not Trade with Any Other

question 40

Multiple Choice

The country of Nemedia does not trade with any other country. Its GDP is $20 billion. Its government collects $4 billion in taxes and pays out $3 billion to households in the form of transfer payments. Consumption equals $13 billion, and investment equals $2 billion. What is the value of the goods and services purchased by the government of Nemedia?

• A) $3 billion
• B) $5 billion
• C) $17 billion
• D) $19 billion

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Definitions:

Common Resource

A type of good that is non-excludable and rival in consumption, such as public parks or fish in the ocean.

Common Resource

A resource that is available to all, but which can become depleted if overused, such as air, water, or public land.

Marginal Benefit

The added value or utility one experiences by consuming one more unit of a good or service.

Marginal Social Benefit

The extra advantage to the community from creating or using an additional unit of a product or service.