Refer to the Above Diagram for a Private Closed Economy

question 78

Multiple Choice

Refer to the above diagram for a private closed economy.At the $200 level of GDP:

• A)consumption will equal GDP.
• B)planned investment will equal saving and unintended investment will be zero.
• C)aggregate expenditures will exceed GDP, causing GDP to rise.
• D)GDP will exceed aggregate expenditures, causing GDP to fall.

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Definitions:

Cost of Goods Sold

Expenses directly related to the production of the goods sold by a business, including material costs and direct labor, crucial for calculating gross profit.

Periodic Inventory System

A periodic inventory system is an accounting method where inventory and cost of goods sold are calculated at set intervals, such as monthly or annually.

FIFO

A method of inventory valuation where the first items purchased are the first ones to be sold.