The Table Shows a Consumption Schedule

question 88

Multiple Choice

The table shows a consumption schedule. All figures are in billions of dollars. 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

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Definitions:

Hierarchies

A system of organization where entities are ranked one above the other based on their status or authority.

Cognitive Maps

Mental representations of physical locations, helping an individual to navigate and understand spatial environments.

Mental Sets

The tendency to approach situations in a certain way because previous methods have been successful; can sometimes inhibit problem-solving.

Heuristics

Simple, efficient rules, either learned or hard-coded by evolutionary processes, that help in decision-making, forming judgments, and solving problems.