ng.cengage.com MindTap Cengage Learning MINDTAP Aplia Homework: Aggregate Demand

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ng.cengage.com MindTap Cengage Learning MINDTAP Aplia Homework: Aggregate Demand and the Powerful Consumer 2. National accounting identities Let C stand for consumption spending, I for investment,G for government purchases, X for exports, IM for imports, DI for disposable income, and NT Consider the following identity and answer the questions that follow C+I+G+(X-IM) = DI + NT Which of the following best characterizes the above identity? National income must equal the total amount of leakages from the nation's flow of income and expenditures National income must equal domestic product. Domestic product must equal the total amount of injections into the nation's flow of income and expenditures National income must equal the total amount of injections into the nation's flow of income and expenditures True or Folse: Imports must equal exports. Faise True

Explanation / Answer

The answer is B -) National income must equal domestic product.

because Di denotes disposable and NT denotes Net taxes. disposable income is calcualated by deduction taxes from income. so DI+NT denotes the National income.or aggregate income

and C+I+G+X-M denotes the domestic product or GDP.

2) The answer is False.

Income can never be equal to exports

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