Refer to the information provided in Figure 24.1 below to answer the question(s) that follow. Figure 24.1
-Refer to Figure 24.1. Suppose that the consumption function is C = 200 + 0.4Yd and taxes are $200 billion, at equilibrium the value of injections are

Question

Refer to the information provided in Figure 24.1 below to answer the question(s) that follow.  Figure 24.1
-Refer to Figure 24.1. Suppose that the consumption function is C = 200 + 0.4Yd and taxes are $200 billion, at equilibrium the value of injections are

Quizplus · Accepted Answer

The equilibrium level of injections is equal to the equilibrium level of withdrawals. In this case, the equilibrium level of withdrawals is equal to consumption plus taxes, which is 200 + 0.4Yd + 200 = 400 + 0.4Yd. The equilibrium level of injections is equal to investment plus government spending, which is I + G. Since we are not given any information about investment or government spending, we cannot determine the exact value of injections. However, we can say that the equilibrium level of injections must be greater than or equal to 400 + 0.4Yd. The only answer choice that satisfies this condition is A) $1,080 billion.

Refer to the Information Provided in Figure 24