Which of the Following Equations Represents GDP for an Open

question 59

Multiple Choice

Which of the following equations represents GDP for an open economy?

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

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Definitions:

Market Price

The existing rate for buying or selling a product or service in a market environment.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick assets such as cash, marketable securities, and accounts receivable.