If Y = C + I + G + (X

question 6

Multiple Choice

If Y = C + I + G + (X - M) (where C = $100, I = $50, G = $50, and X - M = -$10) the equilibrium level of Y equals

• A)$150
• B)$180
• C)$190
• D)$200
• E)$210

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Definitions:

Retained Earnings

The portion of a company's profits not distributed as dividends to shareholders, but instead reinvested in the business or held as reserves.

Assets

Assets are resources owned by a business or individual, which provide economic value or are expected to generate future benefit.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Limited Liability

A legal structure that limits the financial liability of owners or shareholders of a business to the amount they've invested, protecting personal assets from business debts.