-Refer to the graph above to answer this question.Suppose that G equals $650,I equals $380 and X equals $170.If income equals $1,200,which of the following statements is correct?
A)There is a shortage of goods and services of $100.
B)There is a surplus of goods and services of $100.
C)There is a shortage of goods and services of $300.
D)There is a surplus of goods and services of $300.
E)The economy is in expenditures equilibrium.

Question

-Refer to the graph above to answer this question.Suppose that G equals $650,I equals $380 and X equals $170.If income equals $1,200,which of the following statements is correct?
A)There is a shortage of goods and services of $100. 
B)There is a surplus of goods and services of $100. 
C)There is a shortage of goods and services of $300. 
D)There is a surplus of goods and services of $300. 
E)The economy is in expenditures equilibrium.

Quizplus · Accepted Answer

To determine the state of the economy, calculate the total expenditures and compare it to the income. Total expenditures = G + I + X = $650 + $380 + $170 = $1200. Since income also equals $1200, the economy is in equilibrium, meaning there is neither a surplus nor a shortage. However, without the graph or a clear description of how these variables interact in this specific context, the explanation provided is based on standard economic principles. The correct answer would typically depend on the specific details provided in the graph, which are not available in this case.

-Refer to the Graph Above to Answer This Question