C = 40 + 0

question 117

Multiple Choice

C = 40 + 0.8Y Ig = 60 − 2i
I = 10
(Advanced analysis) The equations are for a private closed economy, where C is consumption, Y is the
Gross domestic product, Ig is gross investment, and i is the interest rate. Given that the interest rate is
10 (percent) , the amount that businesses will want to invest will be

• A) $58.
• B) $60.
• C) $40.
• D) $20.

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Definitions:

Currency Risk

The potential for financial loss due to fluctuations in foreign exchange rates affecting investments or business operations involving different currencies.

Foreign Currencies

Currencies used in countries other than one's own, involved in international trade and finance transactions.

Labour Content

The total amount of work or labor hours required to complete a unit of production.