If Real GDP in a Closed Economy Is $40 Billion,consumption

question 239

Multiple Choice

If real GDP in a closed economy is $40 billion,consumption is $20 billion,and government purchases are $10 billion,what is investment?

• A)$10 billion
• B)$30 billion
• C)$40 billion
• D)$70 billion

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Definitions:

Financial Leverage

The use of borrowed funds to finance the acquisition of assets, with the expectation that the income or capital gains from the assets will exceed the cost of borrowing.

Cash Ratio

A liquidity metric that measures a company's ability to pay off short-term liabilities with its cash and cash equivalents.

Debt/Equity Ratio

An index reflecting financial leverage through a company's total debts divided by the equity of its shareholders.

Financial Statement Analysis

The process of examining financial statements to assess a company's financial health and make investment decisions.