The Country of Freedonia Has a GDP of $2,100,consumption of $1,200,and

question 37

Multiple Choice

The country of Freedonia has a GDP of $2,100,consumption of $1,200,and government purchases of $400.This implies that it has

• A)domestic investment of $500.
• B)domestic investment plus net capital outflow of $500.
• C)domestic investment - net capital outflow of $500.
• D)None of the above is correct.

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Definitions:

Short-Run Cost Function

The relationship between the total cost and output when at least one factor of production is fixed.

Quasi-Fixed Costs

Expenses that are fixed over a certain range of production or time but can change if production or the time period changes significantly.

Positive Output

The production of a quantity greater than zero, indicating active operation or production levels in a business or economy.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total output, indicating the average cost per unit of output.