Consider the following information describing a closed economy with no government and where aggregate output is demand determined.All dollar figures are in billions. TABLE 21-3
-Refer to Table 21-3.The equilibrium level of national income ($billions)will be
A)$3000.
B)$3600.
C)$3900.
D)$4000.
E)$4400.

Question

Consider the following information describing a closed economy with no government and where aggregate output is demand determined.All dollar figures are in billions.  TABLE 21-3
-Refer to Table 21-3.The equilibrium level of national income ($billions)will be
A)$3000. 
B)$3600. 
C)$3900. 
D)$4000. 
E)$4400.

Quizplus · Accepted Answer

The equilibrium level of national income occurs where aggregate output (Y) equals aggregate expenditure (E). In this case, the aggregate expenditure is equal to C + I + G. From the table, we can see that at $4000 billion of output, aggregate expenditure is equal to $4000 billion, which means the economy is in equilibrium. Therefore, the answer is D.

Consider the Following Information Describing a Closed Economy with No