Which Equation Will Always Represent GDP in an Open Economy

question 195

Multiple Choice

Which equation will always represent GDP in an open economy?

• A) S = I - G
• B) I = Y - C + G
• C) Y = C + I + G
• D) Y = C + I + G + NX

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Definitions:

Escalation of Commitment

The phenomenon where people increase their investment in a decision despite new evidence suggesting it may be wrong, often due to cognitive biases or emotional attachment.

Framing Error

A cognitive bias where the context or way in which information is presented affects decision-making or judgement.

Auction Fever

Auction fever describes the emotional excitability and competitive bidding that can lead individuals to pay more for items in auctions than they are worth or had intended to spend.

Satisficing

A decision-making strategy that aims for an acceptable or satisfactory solution, rather than the optimal one.