In a closed economy, the total quantity of goods demanded equals the sum of
A)consumption spending, investment spending, and government spending.
B)consumption spending, national saving, and taxes.
C)consumption spending, government spending, and taxes.
D)investment spending, national saving, and taxes.

Question

Quizplus · Accepted Answer

In a closed economy, there is no international trade or transactions, so the only factors affecting the total quantity of goods demanded are domestic factors such as consumption spending (by households), investment spending (by businesses), and government spending. Therefore, the correct choice is (A) consumption spending, investment spending, and government spending.

In a Closed Economy, the Total Quantity of Goods Demanded