In a Closed Economy Without a Government Sector,the Equilibrium Level

question 50

Multiple Choice

In a closed economy without a government sector,the equilibrium level of income is found where income is equal to

• A)planned consumption expenditures divided by planned business investment
• B)the ratio of planned business investment to planned consumption expenditures
• C)planned consumption expenditures plus planned business investment plus planned net exports
• D)planned consumption expenditures plus planned business investment.

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Definitions:

Effective Annual Return

The interest rate on an investment on an annual basis, accounting for the effect of compounding more than once per year.

Nominal Interest

The rate of interest before adjustments for inflation; the stated interest rate on a financial product.

Compounding

The process of finding the future value of a single payment or series of payments.

Amortized

The process of gradually paying off debt through a series of fixed payments over time, which cover both principal and interest.