Use the Following Terms for This Question: C = Consumption

question 10

Multiple Choice

Use the following terms for this question: C = consumption
I = capital investment spending
G = government spending
X = exports of goods and services
M = imports of goods and services
BOP = balance of payments
GDP = gross domestic product
NPV = net present value
INF = inflation
R = real rate of return
The static equation for the nations GDP is:

• A) GDP = C + I + G + (X + M ) × INF
• B) GDP = C + I + G + X + M
• C) GDP = C + I + G + X - M
• D) GDP = C + I + X - M + R

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Definitions:

Government Purchases

Expenditures by government entities on goods and services that directly absorb resources and are part of the nation's gross domestic product (GDP).

Discretionary Fiscal Policy

Government policy involving deliberate measures, such as taxation and spending, to influence economic activity.

Economic Forecasts

Predictions about future economic activity based on current and historical data analysis, including trends in GDP, inflation, and employment.

Budget Document

A detailed financial statement presented by the government outlining its revenue and expenditure for a specific fiscal period.