Consider a closed economy model where Y=C+I+G, consumption is given by the function C = 90 +0.8(Y – T), investment is I = 90, government purchases are G = 60, and the government is running a budget deficit of 10. Which of the following is false? Equilibrium disposable income is 990. Equilibrium GDP is 1000. Autonomous spending is 200. The multiplier is 5.

Consider a closed economy model where Y=C+I+G, consumption is given by the function C = 90 +0.8(Y – T), investment is I = 90, government purchases are G = 60, and the government is running a budget deficit of 10. Which of the following is false? Equilibrium disposable income is 990. Equilibrium GDP is 1000. Autonomous spending is 200. The multiplier is 5.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

Consider a closed economy model where Y = C + I + G, consumption is given by the function
C = 90+ 0.8(Y – T), investment is I = 90, government purchases are G = 60, and the
government is running a budget deficit of 10. Which of the following is false?
Equilibrium disposable income is 990.
Equilibrium GDP is 1000.
Autonomous spending is 200.
The multiplier is 5.

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