$$\begin{array} { l } C = 40 + 0.8 Y \\I _ { g } = 40 \\X = 20 \\M = 30\end{array}$$

question 94

Multiple Choice

$$\begin{array} { l } C = 40 + 0.8 Y \\I _ { g } = 40 \\X = 20 \\M = 30\end{array}$$ (Advanced analysis) The equations give information for a private open economy. The letters $Y , C , I _ { g } , X$ and M stand for GDP, consumption, gross investment, exports, and imports, respectively. Figures are in
Billions of dollars. The equilibrium GDP (=Y) in the economy is

• A) $200.
• B) $245.
• C) $320.
• D) $350.

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Definitions:

U.S. Dollar

The official currency of the United States, widely used as a benchmark and reserve currency globally.

Spot Exchange Rate

The current exchange rate at which one currency can be exchanged for another.

Forward Exchange Rate

An agreed-upon exchange rate for currencies to be exchanged at a future date, used in hedging and trading strategies.

Premium

An amount paid for an insurance policy or the amount by which the price of a bond exceeds its face value.