(Table) When You Look at "Table: GDP Data for Two

question 164

Multiple Choice

(Table) When you look at "Table: GDP Data for Two Countries," which government purchases do you see that represent a larger share of economic activity in which country? $$\begin{array} { | c | c | c | c | c | c | c | } \hline \text { Country } & \text { GDP } & \text { Population } & \text { C } & \text { I } & \text { G } & \text { X-M } \\\hline \text { Econia } & \$ 90 \text { billion } & 30 \text { million } & \text { \$55 billion } & \$ 3 \text { billion } & \$ 30 \text { billion } & \$ 2 \text { billion } \\\hline \text { Macland } & \$ 200 \text { billion } & 50 \text { million } & \$ 100 \text { billion } & \$ 30 \text { billion } & \$ 50 \text { billion } & \$ 20 \text { billion } \\\hline\end{array}$$

• A) Econia because its consumption is smaller.
• B) Macland because its government spending is larger.
• C) Econia because its G/GDP is larger.
• D) It is equal because G/population is the same across both countries.

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Definitions:

Inflation

An increase in the economy’s average price level.

Expansion

Expansion refers to the phase in the economic cycle where an economy is growing and experiencing increasing levels of output, employment, and income.

Actual Output

The actual quantity of goods and services produced in an economy over a specific period.

Demand

The desire and ability of consumers to purchase goods and services at given prices.