ECON 201 Chapter 10: Savings & Investment Spending, Loanable Funds, Financial System
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C = 0.8(DI) + 1000 | C = Consumption expenditure, DI = Disposable Income |
I = 5000 | I = Investment expenditure |
G = 3000 | G = government expenditure |
X = 2000 | X = spending on exports |
M = 1800 | M = spending on imports |
DI = Y - T | Y = real GDP, T = tax revenues/> |
T = 3000 |
Which of the following increases equilibrium real GDP by $2000
Note: you should use the expenditure multipliers from class to get your answer.
a. |
increase in government expenditure (G) by $2000 and pay for it by raising taxes (T) by $2000 |
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b. |
increase government expenditure (G) by $2000 and pay for it by borrowing money |
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c. |
increase taxes (T) by $2000 |
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d. |
decrease taxes (T) by $2000 |
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e. |
all of the above |
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f. |
none of the above |