Assume that consumption spending is equal to $600, government spending is $100 billion, and GDP is $800 billion. If net exports are equal to zero, investment spending must be
A) $700 billion.
B) $600 billion.
C) $500 billion.
D) $100 billion.

Question

Quizplus · Accepted Answer

Investment spending is calculated as GDP - (Consumption + Government Spending + Net Exports). Given the values, investment spending = $800 billion - ($600 billion + $100 billion + $0) = $100 billion.

Assume That Consumption Spending Is Equal to $600, Government Spending