All figures in the table below are in billions of dollars. Refer to the above data. Gross investment is $8 billion, net exports are $4 billion, and government collects a lump-sum tax of $30 billion and spends $30 billion. Assume all taxes are personal taxes and that government spending does not entail shifts in the consumption and investment schedules. The equilibrium GDP will be:
A) $280 billion
B) $290 billion
C) $300 billion
D) $310 billion

Question

All figures in the table below are in billions of dollars.  Refer to the above data. Gross investment is $8 billion, net exports are $4 billion, and government collects a lump-sum tax of $30 billion and spends $30 billion. Assume all taxes are personal taxes and that government spending does not entail shifts in the consumption and investment schedules. The equilibrium GDP will be:
A) $280 billion 
B) $290 billion 
C) $300 billion 
D) $310 billion

Quizplus · Accepted Answer

The Answer of All figures in the table below are in billions of dollars.  Refer to the above data. Gross investment is $8 billion, net exports are $4 billion, and government collects a lump-sum tax of $30 billion and spends $30 billion. Assume all taxes are personal taxes and that government spending does not entail shifts in the consumption and investment schedules. The equilibrium GDP will be:
A) $280 billion 
B) $290 billion 
C) $300 billion 
D) $310 billion

All Figures in the Table Below Are in Billions of Dollars