According to the Absorption Approach,if the Domestic Income Is Greater

question 3

Multiple Choice

According to the absorption approach,if the domestic income is greater than the domestic absorption,then:

• A) A country is experiencing trade surplus.
• B) A country is experiencing trade deficit.
• C) A country is experiencing balanced trade.
• D) A country is always at its full-employment level of production.

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Definitions:

Tax

A required financial fee or another kind of duty enforced on a taxpayer by government authorities, designed to raise funds for government outlays and a range of public expenses.

Price-Elastic Supply

A situation where the quantity supplied of a good changes significantly as a result of changes in its price.

Excise Tax

A tax imposed on specific goods, services, or transactions, often included in the price of products like tobacco, alcohol, and fuel, to generate revenue or discourage consumption.

Price Elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.