If the Equilibrium Level of GDP in a Private Open

question 156

Multiple Choice

If the equilibrium level of GDP in a private open economy is $1000 billion and consumption is $700 billion at that level of GDP, then:

• A)unplanned investment must be occurring.
• B)net exports must be $300 billion.
• C)S + C must equal $300 billion.
• D)I_g + X_n must equal $300 billion.

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Definitions:

Wages Expense

The total amount of compensation paid to employees for services performed during a certain period; this includes salaries, wages, and possibly bonuses.

Balance Sheet

A financial declaration that collates a firm's resources, commitments, and the equity of its shareholders at an established moment.

Statement of Cash Flows

An overview illustrating the effects of changes in balance sheet positions and earnings on the availability of cash and similar assets.

Interrelationship

Interrelationship refers to the way in which two or more concepts, objects, or people are connected and affect each other.