In which of the following situations for a mixed open economy will the level of GDP expand?
A) $\text { when } I _ { g } + X + G \text { exceeds } S _ { a } + M + T$
B) $\text { when } S _ { a } + T + M \text { exceeds } I _ { g } + G + X$
C) $\text { when GDP exceeds } C _ { a } + I _ { g } + G + X _ { n }$
D) $\text { when } I _ { g } + M + T \text { exceeds } C _ { a } + X + S$

Question

Quizplus · Accepted Answer

In a mixed open economy, GDP expands when the sum of private investment ($I_g$), exports ($X$), and government spending ($G$) exceeds the sum of private savings ($S_a$), imports ($M$), and taxes ($T$). This indicates an injection of spending into the economy that is greater than the withdrawal, leading to economic expansion.

In Which of the Following Situations for a Mixed Open when Ig+X+G exceeds Sa+M+T\text { when } I _ { g } + X + G \text { exceeds } S _ { a } + M + T when Ig​+X+G exceeds Sa​+M+T

In Which of the Following Situations for a Mixed Open $\text { when } I _ { g } + X + G \text { exceeds } S _ { a } + M + T$