If there is no government and no foreign sector in the economy
A) personal income and disposable personal income are unequal.
B) international trade is an important component of total spending.
C) gross domestic product equals consumption plus investment.
D) budget and trade deficits are important parts of the model of the economy.

Question

Quizplus · Accepted Answer

Without a government sector or foreign sector, there are only two components left in the economy - consumption and investment. Therefore, GDP would equal consumption plus investment. Choices A, B, and D are not applicable in this scenario.

If There Is No Government and No Foreign Sector in the Economy