Which of the Following Equations Represents GDP for a Closed

question 83

Multiple Choice

Which of the following equations represents GDP for a closed economy?

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

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Definitions:

Multiplier

The factor by which an initial change in spending will alter total economic output, usually in the context of fiscal or monetary policy.

MPC

Marginal Propensity to Consume, which is the proportion of additional income that a consumer spends on goods and services as opposed to saving it.

Capital Goods

Long-term assets such as buildings, machinery, and equipment used in the production of goods and services.

Money Supply

The overall sum of money available in an economy at a designated moment.