$$\begin{array} { | c | c | c | c | c | c | c | }
\hline \text { Price Level } & C & I _ { g } & G & X & M & \text { Real GDP } \
\hline 128 & \$ 18 & \$ 2 & \$ 3 & \$ 1 & \$ 5 & \
\hline 125 & 20 & 4 & 3 & 2 & 4 & \
\hline 122 & 22 & 6 & 3 & 3 & 3 & \
\hline 119 & 24 & 8 & 3 & 4 & 2 & \
\hline 116 & 26 & 10 & 3 & 5 & 1 & \
\hline
\end{array}$$ In the accompanying table for a particular country, C is consumption expenditures, $$I _ { g }$$ is gross
Investment expenditures, G is government expenditures, X is exports, and M is imports. All ?gures
Are in billions of dollars. If the equilibrium level of real GDP is $43 billion, its level of consumption will
Be
A) $20 billion.
B) $22 billion.
C) $24 billion.
D) $26 billion.

Question

$$\begin{array} { | c | c | c | c | c | c | c | } 
\hline \text { Price Level } & C & I _ { g } & G & X & M & \text { Real GDP } \
\hline 128 & \$ 18 & \$ 2 & \$ 3 & \$ 1 & \$ 5 & \
\hline 125 & 20 & 4 & 3 & 2 & 4 & \
\hline 122 & 22 & 6 & 3 & 3 & 3 & \
\hline 119 & 24 & 8 & 3 & 4 & 2 & \
\hline 116 & 26 & 10 & 3 & 5 & 1 & \
\hline
\end{array}$$ In the accompanying table for a particular country, C is consumption expenditures, $$I _ { g }$$ is gross
Investment expenditures, G is government expenditures, X is exports, and M is imports. All ?gures
Are in billions of dollars. If the equilibrium level of real GDP is $43 billion, its level of consumption will
Be
A) $20 billion.
B) $22 billion.
C) $24 billion.
D) $26 billion.

Quizplus · Accepted Answer

To find the equilibrium level of real GDP, we add up C, Ig, G, X, and subtract M for each row until we find the one that equals $43 billion. The formula is: GDP = C + Ig + G + X - M. For the row where C is $26 billion, the calculation is $26 + $10 + $3 + $5 - $1 = $43 billion. Thus, the level of consumption when the real GDP is $43 billion is $26 billion.

In the Accompanying Table for a Particular Country, C Is