$$\begin{array} { l }
C = 26 + 0.75 Y \
I _ { g } = 60 \
X = 24 \
M = 10
\end{array}$$ (Advanced analysis) The equations give information for a private open economy. The letters Y, C, Ig, X, and M stand for GDP, consumption, gross investment, exports, and imports, respectively. Figures are in
Billions of dollars. The equilibrium GDP for the open economy is
A) $390.
B) $375.
C) $320.
D) $400.

Question

$$\begin{array} { l } 
C = 26 + 0.75 Y \
I _ { g } = 60 \
X = 24 \
M = 10
\end{array}$$ (Advanced analysis) The equations give information for a private open economy. The letters Y, C, Ig, X, and M stand for GDP, consumption, gross investment, exports, and imports, respectively. Figures are in
Billions of dollars. The equilibrium GDP for the open economy is
A) $390.
B) $375.
C) $320.
D) $400.

Quizplus · Accepted Answer

To find the equilibrium GDP for a private open economy, we use the equation:

Y = C + Ig + X - M

Substituting the given values, we get:

Y = 26 + 0.75Y + 60 + 24 - 10

Simplifying, we get:

0.25Y = 100

Y = 400

Therefore, the equilibrium GDP for the open economy is $400 billion. The correct answer is choice D.

C=26+0.75YIg=60X=24M=10\begin{array} { l } C = 26 + 0.75 Y \\I _ { g } = 60 \\X = 24 \\M = 10\end{array}C=26+0.75YIg​=60X=24M=10​

$\begin{array} { l } C = 26 + 0.75 Y \\I _ { g } = 60 \\X = 24 \\M = 10\end{array}$