Suppose an economy operates at a real GDP level of $855, where saving = $400;investment = $95;government spending = $365;taxes = $130;imports = $210;exports = $170.Which of the following statements is true in the light of the given information?
A) Aggregate expenditures will fall, because total injections exceed total leakages by $110.
B) Real GDP will increase, because total injections are less than $855.
C) The economy will be in equilibrium, because leakages equal injections.
D) Real GDP will fall, because total leakages exceed total injections by $110.
E) Inventories will rise, because planned saving exceeds planned investment.
Correct Answer:
Verified
Q34: The figure given below represents the leakages
Q35: The figure given below represents the leakages
Q36: Suppose an economy has a government budget
Q37: The spending multiplier measures the change in
Q38: If Saving+Tax+Import > Investment+Government spending+Export, then _
Q40: The figure given below represents the leakages
Q41: The table given below reports the value
Q42: The table given below reports the value
Q43: Scenario 10.2 A hypothetical open economy has
Q44: Scenario 10.2 A hypothetical open economy has
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents