In a mixed open economy the equilibrium level of GDP exists where: A)C_a + I_g + X_n intersects the 45-degree line. B)C_a + I_g = S_a + T + X. C)C_a + I_g + X_n + G = GDP. D)C_a + I_g + X_n = S_a + T.

Question

Quizplus · Accepted Answer

In a mixed open economy, the equilibrium level of GDP exists where the total expenditure on goods and services (C+I+G+X) equals the total income generated in the economy (GDP). Therefore, the correct equation is C_a + I_g + X_n + G = GDP.

In a Mixed Open Economy the Equilibrium Level of GDP