If an Economy Is Operating at a Point on the C

question 33

Multiple Choice

If an economy is operating at a point on the C + I line that lies below the 45-degree line

• A) the economy is in equilibrium.
• B) the C + I line shifts down.
• C) GDP will rise.
• D) unwanted inventories will accumulate.
• E) intended saving equals intended investment.

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Definitions:

World Price

The international market price of a good or service, determined by global supply and demand, which influences domestic prices and competition.

International Trade

The exchange of goods, services, and capital across international borders or territories, driven by economic motives like gaining access to new markets or acquiring resources.

Unilateral Approach

A strategy or action taken by a single nation or entity independently, without coordination with others.

Free Trade

Free Trade is a policy where governments do not discriminate against imports or interfere with exports, allowing goods to move freely between countries.