In a Private Closed Economy, the Equilibrium GDP Is Achieved

question 182

Multiple Choice

In a private closed economy, the equilibrium GDP is achieved where GDP equals:

• A)C + I_g.
• B)C - I_g.
• C)C + S.
• D)C - S.

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Definitions:

Reinvestment Risk

The risk that future cash flows from an investment will not be reinvested at the same rate as the initial investment, affecting the overall return.

Perfectly Negatively Correlated

A statistical measure indicating that two variables move in opposite directions to one another completely and consistently.

Global Minimum Variance Portfolio

A portfolio strategy that seeks to minimize the total variance of portfolio returns, focusing on the lowest possible risk for a given set of securities without targeting specific returns.

Expected Rate of Return

The average return anticipated on an investment, based on historical data or probabilistic models.