GDP Equals $5 Trillion

question 43

Multiple Choice

GDP equals $5 trillion. If consumption equals $3.5 trillion, investment equals $1 trillion, and government spending equals $1.5 trillion, then:

• A)​exports exceed imports by $1 trillion.
• B)​imports exceed exports by $1 trillion.
• C)​net exports equal zero.
• D)​exports exceed imports by $1.5 trillion.

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Definitions:

Compounded Monthly

A method of calculating interest in which the interest accrued in each month adds to the principal for the calculation of subsequent interest.

Effective Annual Rate

The interest rate that is annually compounded, taking into account the effects of compounding.

Perpetuity

A type of annuity that pays an infinite series of cash flows, with no end date.

Opportunity Cost

The financial consequence of skipping the immediate secondary choice while deciding.