Suppose an Economy Operates at a Real GDP Level of $855

question 67

Multiple Choice

Suppose an economy operates at a real GDP level of $855, where saving = $400;investment = $95;government spending = $365;taxes = $130;imports = $210;exports = $170.Which of the following statements is true in the light of the given information?

• A)Aggregate expenditures will fall, because total injections exceed total leakages by $110.
• B)Real GDP will increase, because total injections are less than $855.
• C)The economy will be in equilibrium, because leakages equal injections.
• D)Real GDP will fall, because total leakages exceed total injections by $110.
• E)Inventories will rise, because planned saving exceeds planned investment.

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Definitions:

Blood Pressure

The force exerted by circulating blood on the walls of blood vessels, essential for maintaining bodily functions.

Renin

An enzyme secreted by the kidneys that plays a crucial role in the body's renin-angiotensin system (RAS), affecting blood pressure and fluid balance.

Lasix

Lasix is a brand name for furosemide, a powerful diuretic medication used to treat fluid build-up and swelling caused by heart failure, liver disease, kidney disease, and other conditions.

Ascending Loop of Henle

The segment of the nephron in the kidney that transports filtrate upwards from the loop of Henle, crucial for the concentration of urine.