-Refer to the above diagram where I_g is gross investment,X is exports,G is government purchases,S and S_a are saving before and after taxes respectively,M is imports,and T is net taxes,that is,taxes less transfers.The equilibrium level of GDP for this economy is:

Question

-Refer to the above diagram where I<sub>g</sub> is gross investment,X is exports,G is government purchases,S and S<sub>a</sub> are saving before and after taxes respectively,M is imports,and T is net taxes,that is,taxes less transfers.The equilibrium level of GDP for this economy is: A) Y<sub>4</sub>. B) Y<sub>3</sub>. C) Y<sub>2</sub>. D) Y<sub>1</sub>.

Quizplus · Accepted Answer

The equilibrium level of GDP occurs where aggregate expenditure equals total output or GDP. This is typically where planned investment, government spending, and net exports equal savings plus taxes. The diagram likely shows this balance at Y₃.

-Refer to the Above Diagram Where Ig Is Gross Investment,X

-Refer to the Above Diagram Where I_g Is Gross Investment,X