The following information is consumption and investment data for a private closed economy. Figures are
in billions of dollars.
C = 60 + .6Y
I = I0= 30
1. Refer to the above data. The equilibrium level of income (Y ) is:
A) 360. B) 225. C) 200. D) 135.
Where I is planned investment, S is saving, and Y is gross domestic product (GDP).
I = I0= 80 (6.3)
S = -80 + .4Y (6.4)
2. Refer to equations (6.3) and (6.4). The equilibrium GDP will be:
A) $160. B) $400. C) $360. D) $480.
3. In the diagram for a closed economy, at the $200 level of GDP:
A) consumption is $200 and planned investment is $50 so that planned aggregate expenditures
B) consumption is $200 and planned investment is $100 so that planned aggregate
expenditures are $300.