Assume That Equilibrium GDP (Y) Is 5,000

question 159

Multiple Choice

Assume that equilibrium GDP (Y) is 5,000. Consumption (C) is given by the equation C = 500 + 0.6(Y - T) . Taxes (T) are equal to 1,000. Government spending is 600. In this case, equilibrium investment is:

• A)600.
• B)1,100.
• C)1,500.
• D)2,200.

Recognize the significance of budgeting in managing finances and reaching financial goals.

Identify and differentiate between fixed and variable expenses in personal budgeting.

Understand the relationship between personal financial decisions, opportunity costs, and financial security.

Understand the concept and calculation of budget surplus and deficit.

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Definitions:

Consideration

In contract law, something of value exchanged between parties that is required for the formation of a legal contract.

Assignment

The transfer of a contract right from one person to another.

Frustration of Purpose

A legal defense allowing parties to terminate a contract when an unforeseen event undermines the contract's principal purpose, rendering it impossible to fulfill.

Doctrine

A belief or set of beliefs held and taught by a church, political party, or other group.