The following information is for a closed economy: GDP $100 200 300 400 500 600 700 C $100 160 220 280 340 400 460 S $0 40 80 120 160 200 240 Ig $80 80 80 80 80 80 80 Refer to the above information. If government now spends $80 billion at each level of GDP and taxes remain at zero, the equilibrium GDP: Multiple Choice will rise to $600. will rise to $700. will rise to $500. may either rise or fall.

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Chapter1: Making Economics Decisions
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2.
The following information is for a closed economy:
GDP
$100
200
300
400
500
600
700
C
$100
160
220
280
340
400
460
S
$0
401
80
120
160
200
240
Ig
$80
80
80
80
80
80
80
Refer to the above information. If government now spends $80 billion at each level of GDP and taxes remain at
zero, the equilibrium GDP:
Multiple Choice
will rise to $600.
will rise to $700.
will rise to $500.
may either rise or fall.
Transcribed Image Text:2. The following information is for a closed economy: GDP $100 200 300 400 500 600 700 C $100 160 220 280 340 400 460 S $0 401 80 120 160 200 240 Ig $80 80 80 80 80 80 80 Refer to the above information. If government now spends $80 billion at each level of GDP and taxes remain at zero, the equilibrium GDP: Multiple Choice will rise to $600. will rise to $700. will rise to $500. may either rise or fall.
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