The table shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars. Refer to the above table. If planned investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $10, and lump-sum taxes also increased from $0 to $10, other things constant, then the equilibrium real GDP would become:
A) $660
B) $630
C) $640
D) $650

Question

The table shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars.  Refer to the above table. If planned investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $10, and lump-sum taxes also increased from $0 to $10, other things constant, then the equilibrium real GDP would become:
A) $660 
B) $630 
C) $640 
D) $650

Quizplus · Accepted Answer

The Answer of The table shows the consumption schedule for a hypothetical economy. All figures are in billions of dollars.  Refer to the above table. If planned investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $10, and lump-sum taxes also increased from $0 to $10, other things constant, then the equilibrium real GDP would become:
A) $660 
B) $630 
C) $640 
D) $650

The Table Shows the Consumption Schedule for a Hypothetical Economy