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-In the Above Table, There Are No Taxes and No

Question 223

Multiple Choice

 Real GDP  (dollars)   Consumption  expenditure  (dollars)   Investment  (dollars)   Government  expenditure  (dollars)  3,0002,5005005004,0003,2505005005,0004,0005005006,0004,7505005007,0005,5005005008,0006,250500500\begin{array} { | l | l | l | l | } \hline \begin{array} { l } \text { Real GDP } \\\text { (dollars) }\end{array} & \begin{array} { l } \text { Consumption } \\\text { expenditure } \\\text { (dollars) }\end{array} & \begin{array} { l } \text { Investment } \\\text { (dollars) }\end{array} & \begin{array} { l } \text { Government } \\\text { expenditure } \\\text { (dollars) }\end{array} \\\hline 3,000 & 2,500 & 500 & 500 \\\hline 4,000 & 3,250 & 500 & 500 \\\hline 5,000 & 4,000 & 500 & 500 \\\hline 6,000 & 4,750 & 500 & 500 \\\hline 7,000 & 5,500 & 500 & 500 \\\hline 8,000 & 6,250 & 500 & 500 \\\hline\end{array}
-In the above table, there are no taxes and no imports or exports. The equilibrium level of expenditure for this economy is


A) $3,000.
B) $5,000.
C) any level because investment always equals government expenditures.
D) no level because consumption expenditure is always less than real GDP.

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