(Advanced Analysis)Answer the Question on the Basis of the Following

question 36

Multiple Choice

(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy.The letters Y,C_a,I_g,X_n,G,and T stand for GDP,consumption,gross investment,net exports,government purchases,and net taxes respectively.Figures are in billions of dollars. $\begin{aligned}C _ { a } & = 25 + 0.75 ( Y - T ) \\I _ { g } & = I _ { g 0 } = 50 \\X _ { n } & = X _ { n 0 } = 10 \\G & = G _ { 0 } = 70 \\T & = T _ { 0 } = 30\end{aligned}$ Refer to the information.If government desired to raise the equilibrium GDP to $650,it could:

• A) raise G by $45 and reduce T by $10.
• B) raise G by $40 and reduce T by $30.
• C) raise G by $30 or reduce T by $40.
• D) raise both G and T by $40.

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