In an Open Economy,aggregate Demand Is the Sum of

question 10

Multiple Choice

In an open economy,aggregate demand is the sum of

• A)consumer expenditure,actual investment spending,and government spending.
• B)consumer expenditure,planned investment spending,and government spending.
• C)consumer expenditure,actual investment spending,government spending,and net exports.
• D)consumer expenditure,planned investment spending,government spending,and net exports.

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Definitions:

Rate Of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s cost.

Break-Even Interest Rate

The interest rate at which an investment generates returns that are sufficient to cover the costs associated with the investment, resulting in a net profit of zero.

Zero-Coupon Bond

A bond that does not pay interest during its life but is sold at a discount and pays its full face value at maturity.

Forward Rate

An interest rate applicable to a financial transaction that will take place in the future.