Question

If the equilibrium level of GDP in a private open economy is $1000 billion and consumption is $700 billion at that level of GDP, then: A. saving must be $300 billion. B. net exports must be $300 billion. C. S + C must equal $300 billion. D. Ig + Xn must equal $300 billion.

Answer 1

In a private open economy with an equilibrium GDP level of $1000 billion and consumption at that level of GDP of $700 billion, I g + X n must equal $300 billion.

A system of interconnected production, consumption, and trade activities is called an economy, and it ultimately determines how resources are distributed among all of the players. To meet the requirements of persons residing in and participating in the economy, commodities and services are produced, consumed, and distributed.

Whether the entity is a country or a small town, all activities connected to the creation, consumption, and exchange of products and services are included in the definition of an economy.

A single economy is not like another. Each is shaped by the resources, culture, laws, history, and geography unique to it. Each changes based on the decisions and deeds of the individuals.

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