In a Graph Relating Private Spending (C + Ig) to Real

question 2

Essay

In a graph relating private spending (C + Ig) to real gross domestic product (GDP), what does the 45-degree line represent?

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Definitions:

Gift Tax

A tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return.

Fair Market Value

The price at which an asset would trade in a competitive auction setting, reflecting the value of the asset in the marketplace.

Gain

The financial benefit obtained when the selling price of an asset exceeds its purchase price.

Assumes Liability

Taking on the legal responsibility for a debt or obligation.