The Table Given Below Shows the Levels of National Income

question 114

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. If autonomous saving decreases by $200, what will happen at the current equilibrium level of income?

• A) Autonomous consumption spending will also decrease by $200, and so no change in equilibrium income occurs.
• B) Total leakages in the economy will exceed total injections.
• C) There will be pressure on real GDP to rise.
• D) There will be pressure on the economy to contract.
• E) Unplanned inventories in the economy will grow.

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Definitions:

Credit Sale

involves selling goods or services to a customer with payment to be received at a later date.

Indirect Cost

Expenses that are not directly attributable to a specific product, service, or project, such as utilities or rent for office space.

Building's Custodian

A person responsible for the maintenance and upkeep of a building.