(Advanced Analysis)Answer the Question on the Basis of the Following $\begin{array} { l } S = - 20 + 0.4 Y \\I _ { g } = 25 - 3 i\end{array}$

question 160

Multiple Choice

(Advanced analysis) Answer the question on the basis of the following information for a private closed economy. $\begin{array} { l } S = - 20 + 0.4 Y \\I _ { g } = 25 - 3 i\end{array}$ where S is saving,I_g is gross investment,i is the real interest rate,and Y is GDP. Refer to the information.If the real interest rate is 5 (percent) ,investment will be:

• A) $10 and the equilibrium GDP will be $75.
• B) $15 and the equilibrium GDP will be $100.
• C) $10 and the equilibrium GDP will be $120.
• D) $15 and the equilibrium GDP will be $180.

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period.

Current Cost

The present-day cost to replace an asset or to purchase an equivalent asset, reflecting current market prices.

Actual Cost

The actual amount of money spent to acquire an asset, including all costs necessary to get the asset ready for its intended use.

Specific Identification

An inventory valuation method in which the cost of each individual item in inventory is tracked and used to compute cost of goods sold.