The following data refers to a national economy with all figures in $billions.

-Refer to the table above to answer this question.If investment were to increase by $100,what would be the new value of equilibrium income?
A)$1,200
B)$1,400
C)$1,600
D)$2,000
E)$2,400

Question

The following data refers to a national economy with all figures in $billions.
 
-Refer to the table above to answer this question.If investment were to increase by $100,what would be the new value of equilibrium income?
A)$1,200 
B)$1,400 
C)$1,600 
D)$2,000 
E)$2,400

Quizplus · Accepted Answer

According to the formula for equilibrium income (Y = C + I + G + NX), a $100 increase in investment will result in a $400 increase in equilibrium income (multiplier = 4). Therefore, the new value of equilibrium income will be $1,400 ($1,300 + $100 = $1,400).

The Following Data Refers to a National Economy with All