Suppose Output Is $440 Billion,government Purchases Are $40 Billion,desired Consumption

question 84

Multiple Choice

Suppose output is $440 billion,government purchases are $40 billion,desired consumption is $320 billion,and net exports are $35 billion.Absorption is equal to

• A)$405 billion.
• B)$420 billion.
• C)$435 billion.
• D)$440 billion.

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Definitions:

Absolute Advantage

The ability of a party, company, or country to produce a good or service more efficiently than its competitors using the same amount of resources.

Comparative Advantage

The economic principle that a country or entity should produce goods and services for which it has a lower opportunity cost than its trading partners.

Mutual Gain

A situation or outcome in negotiation or trade where all parties involved benefit or achieve some level of advantage.

Tariffs

Tariffs are taxes imposed by a government on imported or exported goods.