The Table Shows the Consumption Schedule for a Hypothetical Economy

question 47

Multiple Choice

The table shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars. Refer to the above table. If planned investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $10, and lump-sum taxes also increased from $0 to $10, other things constant, then the equilibrium real GDP would become:

• A) $660
• B) $630
• C) $640
• D) $650