In a Mixed Open Economy, Where Aggregate Expenditures Exceed GDP

question 81

Multiple Choice

In a mixed open economy, where aggregate expenditures exceed GDP:

• A)I_g + X + G = C_a.
• B)C_a + I_g + X_n + G < domestic output.
• C)I_g > S.
• D)I_g + X + G > S_a + M + T.

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Definitions:

Comparative Advantage

The capability of a person, business, or nation to manufacture a product or provide a service with a smaller opportunity cost compared to rivals.

Absolute Advantage

The capability of a country, entity, or individual to produce a particular good or service more efficiently than others, using the same amount of resources.

Producing

The act of creating goods or services through the combination of labor, capital, and resources, intended for exchange or personal use.

Exchange

The process by which parties trade goods, services, or financial instruments, facilitating the transfer of ownership and value.