The Table Given Below Shows the Real GDP, Aggregate Expenditures

question 96

Multiple Choice

The table given below shows the real GDP, aggregate expenditures, saving, and imports of an economy.
Table 10.4
$\begin{array}{|c|c|c|c|}\hline \text { Real GDP } & \begin{array}{c}\text { Aggregate } \\\text { Expenditures }\end{array} & \text { Saving } & \text { Imports } \\\hline \$ 0 & \$ 800 & -\$ 300 & \$ 50 \\\$ 1,000 & \$ 1,600 & -\$ 200 & \$ 150 \\\$ 2,000 & \$ 2,400 & -\$ 100 & \$ 250 \\\$ 3,000 & \$ 3,200 & \$ 0 & \$ 350 \\\$ 4,000 & \$ 4,000 & \$ 100 & \$ 450 \\\$ 5,000 & \$ 4,800 & \$ 200 & \$ 550 \\\$ 6,000 & \$ 5,600 & \$ 300 & \$ 650 \\\hline\end{array}$
-Refer to Table 10.4. Given a potential GDP of $6,000, the recessionary gap equals _____.

• A) $200
• B) $400
• C) $1,000
• D) $2,000
• E) $5,000

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Definitions:

Cartel

A group of independent market participants who collude to control prices and production in order to monopolize a market.

Fixed Cost

Costs that do not change with the level of output, such as rent or salaries.

Cartel

A formal agreement among competing firms to control prices or exclude entry of a new competitor in the market, often resulting in higher prices.

Marginal Cost

Marginal Cost is the cost of producing one more unit of a good or service, a crucial concept in economics for decision-making and pricing strategies.