In Which of the Following Situations for an Open Mixed

question 121

Multiple Choice

In which of the following situations for an open mixed economy will the level of GDP contract?

• A)when Ca + S + M exceeds Ig + X + T
• B)when Ig + X + T exceeds Ca + S + M
• C)when Sa + M + T exceeds Ig + X + G
• D)when Ig + X + G exceeds Sa + M + T

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Definitions:

Parent Company

A parent company is a corporation that owns enough voting stock in another corporation (subsidiary) to control its board of directors and therefore its operations and policies.

Subsidiary

A company that is completely or partially owned and wholly controlled by another company, referred to as the parent company.

Voting Stock

Shares that give the shareholder a right to vote on company matters, such as electing the board of directors.

Control

The power to direct the financial and operating policies of a business with a view to gain economic benefits from its activities.