Refer to the Diagram Below for a Private Closed Economy

question 55

Multiple Choice

Refer to the diagram below for a private closed economy.Saving and planned investment are equal:

• A) only at the $300 level of GDP.
• B) only at the $250 level of GDP.
• C) at all levels of GDP.
• D) only at the $375 level of GDP.

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Definitions:

Exchange Rate

The exchange rate reflecting the value of one currency compared to another.

Spot Exchange Rate

This is the current exchange rate at which two currencies can be exchanged immediately.

Eurocurrency

Currency deposited by national governments or corporations in banks outside their home market, primarily used for lending, borrowing, and investing internationally.

Political Risk

The risk of losing money due to political instability or changes in government policy affecting an investment.