The Following Question Are Based on the Following Consumption Function

question 63

Multiple Choice

The following question are based on the following consumption function for a hypothetical economy. Assume autonomous intended investment is $200 billion and there are no government expenditures, exports, or imports.

-The current equilibrium level of GDP is ________ billion.

• A) $2,000
• B) $2,100
• C) $2,200
• D) $2,300
• E) $2,400

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Definitions:

Free Trade

A policy by which governments do not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas.

Domestic Producers

Local manufacturers or producers who create goods and services within a country's borders, contributing to the domestic economy.

Foreign Producers

Companies or individuals that produce goods or services in a country other than the one where the goods or services are consumed.

Tariff Revenue

The income generated by the government from taxing imports.