# ECONOMICS (CBSE/UGC NET)

## ECONOMICS

### AGGREGATE DEMAND

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
If consumption spending totals \$40 million, investment is \$30 million, tax revenue totals \$15 million, government spending is \$10 million, exports are \$3 million and imports are \$5 million, GDP is ____
 A \$103 million B \$80 million C \$93 million D \$78 million
Explanation:

Detailed explanation-1: -One small change in the government’s activities will create a big change in the overall economy. The spending multiplier formula is calculated by dividing 1 by the MPS. It can also be calculated by dividing 1 by 1 minus MPC.

Detailed explanation-2: -Thus investment is everything that remains of total expenditure after consumption, government spending, and net exports are subtracted (i.e. I = GDP − C − G − NX ).

Detailed explanation-3: -In the question, GDP = \$1, 000, Consumption = \$600 and governmnet purchases = \$200. Savings and investment = \$1, 000 − \$800 = \$200. Need a fast expert’s response?

Detailed explanation-4: -GDP = C + G + I + NX. C = consumption or all private consumer spending within a country’s economy, including, durable goods (items with a lifespan greater than three years), non-durable goods (food & clothing), and services. More items •26-Nov-2022

There is 1 question to complete.