Use the Figure Below to Answer the Following Questions

question 45

Multiple Choice

Use the figure below to answer the following questions.

Figure 27.2.1
There are no exports or imports in this economy.
-Refer to Figure 27.2.1. When real GDP is equal to Yc, then aggregate planned expenditure is

• A)less than real GDP, and real GDP decreases.
• B)less than real GDP, and real GDP increases.
• C)greater than real GDP, and real GDP decreases.
• D)equal to real GDP, and real GDP neither increases nor decreases.
• E)greater than real GDP, and real GDP increases.

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Definitions:

Foreign Exchange

The conversion or trading of one currency into another currency.

Triangle Arbitrage

A risk-free profit that arises from discrepancies between three foreign currencies in the foreign exchange market.

Profit

The financial gain realized when the revenue from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

British Pounds

The official currency of the United Kingdom, also known as sterling, symbolized by £.