The Table Given Below Shows the Levels of National Income

question 57

Multiple Choice

The table given below shows the levels of national income (Y) and the corresponding levels of saving (S) , investment (I) , export (X) , and import (M) of an open economy.
Table 10.2
$\begin{array}{l}\begin{array}{|c|c|c|c|c|c|}\hline \boldsymbol{Y} & \boldsymbol{S} & \boldsymbol{I} & \boldsymbol{G} & \boldsymbol{X} & \boldsymbol{M} \\\hline \$ 935 & -\$ 250 & \$ 320 & \$ 40 & \$ 170 & \$ 100 \\\$ 2,100 & \$ 0 & \$ 320 & \$ 140 & \$ 170 & \$ 130 \\\$ 3,320 & \$ 250 & \$ 320 & \$ 200 & \$ 200 & \$ 350 \\\$ 4,800 & \$ 375 & \$ 320 & \$ 240 & \$ 230 & \$ 415 \\\$ 5,230 & \$ 650 & \$ 320 & \$ 320 & \$ 250 & \$ 590 \\\$ 6,300 & \$ 825 & \$ 320 & \$ 340 & \$ 270 & \$ 610 \\\hline\end{array}\\\text { Taxes equal zero }\end{array}$
-Consider the economy described in Table 10.2. Calculate the level of consumption spending when the economy is in equilibrium.

• A) $4,425
• B) $4,010
• C) $4,050
• D) $5,175
• E) $4,800

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that may not be collectible.

Aging of Accounts Receivable

A report or method that categorizes a company's accounts receivable according to the length of time an invoice has been outstanding to evaluate the likelihood of collecting on those invoices.

Receivables Balance

The total amount owed to a business by its customers or clients for goods or services delivered on credit.

Allowance Method

An accounting technique used to estimate and account for doubtful accounts, where some receivables will not be collected.