Assume a Country Is Open

question 63

Multiple Choice

Assume a country is open. Given this information, which of the following must occur?

• A) S + T = I + G.
• B) Demand for domestic goods will be equal to the domestic demand for goods.
• C) S + T = I + G + NX.
• D) Demand for domestic goods will be greater than the domestic demand for goods.
• E) Demand for domestic goods will be less than the domestic demand for goods.

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Definitions:

Consumption

The use of goods and services by households, constituting one of the primary components of GDP and a fundamental concept in economics signifying final consumption.

Salience

The quality of being particularly noticeable or important; prominence.

Demand

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

Elastic

Describes a situation in economics where the demand for or supply of a good is sensitive to changes in price, meaning a small change in price leads to a significant change in quantity demanded or supplied.