-In the Above Table, There Are No Taxes and No

$$\begin{array} { | l | l | l | l | } \hline \begin{array} { l } \text { Real GDP } \\\text { (dollars) }\end{array} & \begin{array} { l } \text { Consumption } \\\text { expenditure } \\\text { (dollars) }\end{array} & \begin{array} { l } \text { Investment } \\\text { (dollars) }\end{array} & \begin{array} { l } \text { Government } \\\text { expenditure } \\\text { (dollars) }\end{array} \\\hline 3,000 & 2,500 & 500 & 500 \\\hline 4,000 & 3,250 & 500 & 500 \\\hline 5,000 & 4,000 & 500 & 500 \\\hline 6,000 & 4,750 & 500 & 500 \\\hline 7,000 & 5,500 & 500 & 500 \\\hline 8,000 & 6,250 & 500 & 500 \\\hline\end{array}$$
-In the above table, there are no taxes and no imports or exports. Suppose that investment increases from $500 to $750 at each level of real GDP. After the increase, what is the level of planned expenditure when real GDP equals $5,000?

A) $1,000
B) $5,000
C) $250
D) $5,250

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free