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

question 53

Multiple Choice

$\begin{array} { l } C = 40 + 0.8 \mathrm { Y } \\I _ { g } = 40 \\X = 20 \\M = 30\end{array}$
(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. International trade in this case

• A) has an expansionary effect on GDP.
• B) has a contractionary effect on GDP.
• C) has no effect on GDP.
• D) is causing in?ation in this economy.

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Definitions:

Stock Dividend

A distribution of additional shares of a company's stock to its shareholders instead of cash.

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company’s profits.

Balance Sheet

An account reporting an organization's resources, debts, and owner's equity at a particular instant.

Stock Dividend

An issuance of more shares to investors as a dividend, instead of a cash distribution.