-In the Above Table, There Are No Taxes and No

question 70

Multiple Choice

-In the above table, there are no taxes and no imports or exports. The equilibrium level of expenditure for this economy is

• A) any level because investment always equals government expenditures.
• B) no level because consumption expenditure is always less than real GDP.
• C) $3,000.
• D) $5,000.

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Definitions:

Long Run

A period of time in which all factors of production and costs are variable, allowing firms to adjust all inputs in response to market changes.

Inputs

Inputs are the resources such as labor, materials, and capital that are used in the production process to create goods and services.

Industry Entry

The process by which a new competitor or business enters into an industry, facing various barriers such as high startup costs, regulatory requirements, and competition.

Short Run

A period of time during which at least one of a firm's inputs is fixed and cannot be changed.