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The Following Information Is for a Closed Economy Refer to the Information

Question 104

Multiple Choice

The following information is for a closed economy:  GDP $100200300400500600700 C $100160220280340400460 S$04080120160200240Ig$80808080808080\begin{array}{c}\begin{array}{c}\underline{\text { GDP }} \\\$ 100 \\200 \\300 \\400 \\500 \\600 \\700\end{array}\begin{array}{c}\underline{\text { C }}\\ \$ 100 \\160 \\220 \\280 \\340 \\400 \\460 \end{array}\begin{array}{c}\underline{\text { S}} \\\$ 0 \\40 \\80 \\120 \\160 \\200 \\240 \end{array}\begin{array}{c}I_{g} \\\hline \$ 80 \\80 \\80 \\80 \\80 \\80 \\80 \end{array}\end{array}
Refer to the information.If government spends $80 billion at each level of GDP,and imposes a lump-sum tax of $100:


A) equilibrium GDP will now be $350.
B) equilibrium GDP will now be $400.
C) equilibrium GDP will now be $300.
D) the equilibrium GDP cannot be determined.

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