The following table shows data on consumption at various levels of income.Investment spending is $500 for all levels of income. Income
Consumption
$0
$500
$1,000
$1,250
$2,000
$2,000
$3,000
$2,750
$4,000
$3,500
If there is no government spending or net exports,the equilibrium income level is:
A) $1,000.
B) $2,000.
C) $3,000.
D) $4,000.

Question

Quizplus · Accepted Answer

The equilibrium income level occurs where total spending (consumption + investment) equals income. At $4,000 income, consumption is $3,500, and with $500 investment, total spending is $4,000, matching the income level.

The Following Table Shows Data on Consumption at Various Levels