If Consumption Was 70 Percent of GDP and Investment and Government

question 245

Multiple Choice

If consumption was 70 percent of GDP and investment and government expenditure were both 18 percent each,then we see that

• A)GDP can be over 100 percent because it is "gross" rather than "net."
• B)the error is due to rounding.
• C)exports must be less than imports.
• D)exports must be more than imports.
• E)we must subtract depreciation from investment so that the components of GDP do not exceed 100 percent.

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Definitions:

Domestically Produced

Refers to goods and services that are created or manufactured within a country's borders.

Monetary Policy

The process by which a central authority (most commonly a central bank) manages the supply of money in an economy, typically aiming to control inflation, promote economic growth, and reduce unemployment.

Politicization

The process by which an issue or matter becomes a subject of political debate or action.

Independent Central Banks

Central banking institutions that operate without direct political influence to maintain price stability and economic confidence.