Refer to the information provided in Table 9.8 below to answer the questions that follow.
Table 9.8
All Figures in Billions of Dollars

-Refer to Table 9.8. The economy is at the equilibrium level of output. If government spending increases by $200 billion, the new equilibrium level of output is

Question

Refer to the information provided in Table 9.8 below to answer the questions that follow.
Table 9.8
All Figures in Billions of Dollars
 
-Refer to Table 9.8. The economy is at the equilibrium level of output. If government spending increases by $200 billion, the new equilibrium level of output is

Quizplus · Accepted Answer

The new equilibrium level of output can be found by calculating the new aggregate expenditure (AE) when government spending increases by $200 billion. AE = C + I + G + NX. 
AE = $2,800 + $1,800 + $1,500 + $100 = $7,200 billion 
The new equilibrium level of output is where the AE line intersects with the 45-degree line, which is $5,600 billion.

Refer to the Information Provided in Table 9