In a mixed open economy, if aggregate expenditures exceed GDP, A)Ig + X + G = Ca . B)Ca + Ig + Xn + G S. D)I g + X + G Sa + M + T.

Question

In a mixed open economy, if aggregate expenditures exceed GDP,
A)Ig + X + G = Ca .
B)Ca + Ig + Xn + G < domestic output.
C)Ig > S.
D)I g + X + G > Sa + M + T.

Quizplus · Accepted Answer

When aggregate expenditures exceed GDP, it means that the total spending (including investment, government spending, and net exports) is greater than the total output, which is represented by the equation Ig + X + G > Sa + M + T, where Sa is savings, M is imports, and T is taxes.

In a Mixed Open Economy, If Aggregate Expenditures Exceed GDP