At Equilibrium Real GDP in a Private Closed Economy

question 12

Multiple Choice

At equilibrium real GDP in a private closed economy,

• A) the MPC must equal the APC.
• B) the slope of the aggregate expenditures schedule equals the MPS.
• C) aggregate expenditures and real GDP are equal.
• D) planned saving and consumption are equal.

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Definitions:

Net Taxes

The total taxes paid to the government minus any government transfers or subsidies received.

Taxes

Compulsory financial charges imposed by a government on its citizens to fund public expenditures.

Transfer Payments

Transactions where no goods or services are received in return, such as government benefits, grants, or subsidies.

Economic System

An organized way in which a state or nation allocates its resources and apportions goods and services in the national community.