Use the information in the table to answer the questions that follow. (Hint: Assume this is a closed economy without an international sector; thus, X-M = 0. Also assume that there is no government spending in this economy.) Level of Employment (Millions of workers) 40 45 50 55 60 65 70 Employment, Output, Consumption, and Investment Real GDP (Output) Equals Disposable Income (Billions of dollars) 325 375 425 The equilibrium level of real GDP in this economy is $ 475 525 575 625 billion. If the full-employment output level is $375 billion, the economy is experiencing Consumption (Billions of dollars) 300 325 350 375 400 425 450 gap. Investment (Billions of dollars) 100 100 100 100 100 100 100
Use the information in the table to answer the questions that follow. (Hint: Assume this is a closed economy without an international sector; thus, X-M = 0. Also assume that there is no government spending in this economy.) Level of Employment (Millions of workers) 40 45 50 55 60 65 70 Employment, Output, Consumption, and Investment Real GDP (Output) Equals Disposable Income (Billions of dollars) 325 375 425 The equilibrium level of real GDP in this economy is $ 475 525 575 625 billion. If the full-employment output level is $375 billion, the economy is experiencing Consumption (Billions of dollars) 300 325 350 375 400 425 450 gap. Investment (Billions of dollars) 100 100 100 100 100 100 100
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use the information in the table to answer the questions that follow. (Hint: Assume this is a closed economy without an international sector; thus,
X-M = 0. Also assume that there is no government spending in this economy.)
Employment, Output, Consumption, and Investment
Level of Employment Real GDP (Output) Equals Disposable Income
(Millions of workers)
(Billions of dollars)
40
325
45
375
425
50
475
55
60
65
70
The equilibrium level of real GDP in this economy is $
525
575
625
billion.
If the full-employment output level is $375 billion, the economy is experiencing
Consumption
(Billions of dollars)
300
325
350
375
400
425
450
gap.
Investment
(Billions of dollars)
100
100
100
100
100
100
100
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