Assume That Equilibrium GDP (Y) Is 5,000

question 159

Multiple Choice

Assume that equilibrium GDP (Y) is 5,000. Consumption (C) is given by the equation C = 500 + 0.6(Y - T) . Taxes (T) are equal to 1,000. Government spending is 600. In this case, equilibrium investment is:

• A)600.
• B)1,100.
• C)1,500.
• D)2,200.

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