According to the Classical Economists, Actual Real GDP

question 20

Multiple Choice

According to the classical economists, actual real GDP

• A) always equals actual aggregate income.
• B) sometimes equals actual aggregate income.
• C) never equals actual aggregate income.
• D) is not related to aggregate income.

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Definitions:

National Saving

The total amount of savings generated within a country, equal to the sum of private and public savings, often used for investment.

Crowding Out

The phenomenon where increased government spending leads to a reduction in private sector investment or spending due to higher interest rates or competition for resources.

Discretionary Fiscal Policy

It involves government policy changes in taxation and spending designed to influence economic activity, typically to counteract inflation or deflation and stabilize the economy.

Nominal Output

The total value of goods and services produced by an economy, measured in current prices without adjusting for inflation.