GDP Consumption $600 $580 640 680 720 760 610 640 670 700 18. Refer to the above
ID: 1116652 • Letter: G
Question
GDP Consumption $600 $580 640 680 720 760 610 640 670 700 18. Refer to the above information. If planned investment was I purchases zero, then the equilibrium of goods and services were $20 billion, and taxes and net exports were level of GDP would be: A $600 billion B $640 billion C $680 billion D $720 billion 19. Refer to the above information. If lump-sum taxes were $20 billion, planned investment $45 billion, net exports zero, and government purchases $20 billion, then equilibrium GDP would be: A $640 billion B $680 billion C $720 billion D $760 billion 20. That the economy has achieved aggregate equilibrium is indicated by: A leakages equal injections in the circular flow of aggregate output and aggregate income. B an equality of aggregate expenditures and GDP C the absence of unplanned changes in inventories. D all of these.Explanation / Answer
18)C. 680 because at equilibrium GDP=C+I+G=640+20+20=680
19)C. MPC=change in C/ change in Y=30/40=0.75
Tax of 20 will reduce Y by 60 and increase in I by 25 will increase Y=100
Total Y will increase by 40as compared to 680
New equilibrium Gdp=720
20) ans is D
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