In a Given Year an Economy Has Consumption of $3,000,investment

question 64

Multiple Choice

In a given year an economy has consumption of $3,000,investment of $2,000,government purchases of $1,500,exports of $500,imports of $600,taxes of $1200,transfer payments of $400,and depreciation of $300.This economy's GDP is

• A)$6,400.
• B)$7,000.
• C)$7,600.
• D)$8,900.

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Definitions:

Equilibrium Quantity

Equilibrium quantity is the quantity of goods or services supplied and demanded at the equilibrium price, where the quantity demanded equals the quantity supplied, leading to market stability.

Demand Decreases

A situation where the desire or need for a product or service declines, often leading to lower prices and adjustments in supply.

Supply Increases

Occurs when the quantity of a good or service that a market can offer rises.

Law of Demand

The law of demand states that, all else being equal, as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa.