In an Open-Economy Keynesian Income Model of the Sort Used

question 8

Multiple Choice

In an open-economy Keynesian income model of the sort used in Chapter 24, at the equilibrium level of income,

• A) S + X + T = Y + M + G
• B) S + I + (T - G) = M - X
• C) S + M + T = I + X + G
• D) S + (G - T) - I = (X - M)

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Definitions:

Interest

The cost of borrowing money or the earnings from lending money, paid as a percentage over a period of time.

Account

A record used to keep track of and manage financial transactions within a financial institution, company, or another entity.

Liability

Financial obligations or debts that an individual or organization owes to others, which must be settled over time.

Savings Account

A bank account that earns interest and is typically used by account holders for saving money over a period of time.