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:

Ppf

The Production Possibility Frontier, a curve depicting the maximum output possibilities for two goods, given available resources and technology.

Efficiently

The method of performing or functioning in the best possible manner with the least waste of time and effort.

Marginal Rate

Refers to the rate at which change occurs in one variable as a result of an incremental change in another variable, often used in the context of taxation or productivity.

Transformation

A broad term that can refer to a change or alteration in form, appearance, structure, or character, often used in various contexts including mathematics, technology, and social change.