Suppose That a Mixed Open Economy Is Producing at Its $C _ { a } + I _ { g } + X _ { n } + G \text { must exceed GDP. }$

question 49

Multiple Choice

Suppose that a mixed open economy is producing at its equilibrium income and that net exports are zero. If at the equilibrium income the public sector's budget shows a surplus,

• A) \(C _ { a } + I _ { g } + X _ { n } + G \text { must exceed GDP. }\)
• B) planned investment must exceed saving.
• C) a recessionary expenditure gap must exist.
• D) saving must exceed planned investment.

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Definitions:

Cognitive Rigidity

A psychological disposition characterized by an inability to adapt or shift perspectives in the face of new information or changing environments.

Dichotomous Thinking

The tendency to categorize experiences, people, or items into two extreme and opposite groups.

Right Or Wrong

A moral or ethical judgment about actions or decisions based on societal, personal, or legal standards.

Blaming

The act of accusing someone of being responsible for a fault or wrong.