Which of the Following Equations Is Always Correct in an Open

question 87

Multiple Choice

Which of the following equations is always correct in an open economy?

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

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Definitions:

Direct Materials

Raw materials that are directly traceable and integral to the finished product in the manufacturing process.

Production Costs

The total expenses incurred in the process of producing or manufacturing goods, including raw materials, labor, and overhead costs.

Fixed Portions

Parts of costs or expenses that do not change with the level of production or sales volume, such as rent or salaries.

Break-Even Point

The financial stage where total costs equal total revenue, making the operation neither profitable nor loss-making.