In a mixed open economy, if aggregate expenditures exceed GDP, A) $I _ { g } + X + G = C _ { a }$ B) $C _ { a } + I _ { g } + X _ { n } + G S$ D) $I _ { g } + X + G S _ { a } + M + T$

Question

In a mixed open economy, if aggregate expenditures exceed GDP,
A) $I _ { g } + X + G = C _ { a }$
B) $C _ { a } + I _ { g } + X _ { n } + G < \text { domestic output. }$
C) $I _ { g } > S$
D) $I _ { g } + X + G > S _ { a } + M + T$

Quizplus · Accepted Answer

When aggregate expenditures exceed GDP in a mixed open economy, it implies that the total spending (including investments $I_g$, exports $X$, and government spending $G$) is greater than the sum of domestic savings ($S_a$), imports ($M$), and taxes ($T$). This situation reflects an economy where spending surpasses the available domestic resources and income, leading to a potential deficit or the need for borrowing.

In a Mixed Open Economy, If Aggregate Expenditures Exceed GDP Ig+X+G=CaI _ { g } + X + G = C _ { a }Ig​+X+G=Ca​

In a Mixed Open Economy, If Aggregate Expenditures Exceed GDP $I _ { g } + X + G = C _ { a }$