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The Letters Y, C, Ig, X, and M Stand for GDP

Question 144

Multiple Choice

The letters Y, C, Ig, X, and M stand for GDP, consumption, gross investment, exports, and imports respectively.Figures are in billions of dollars.Ca = 25.75(Y - T ) Ig = Ig0 = 50
Xn = Xn0 = 10
G = G0 = 70
T = T0 = 30
Refer to the above information.If government desired to raise the equilibrium GDP to $650, it could:


A) raise G by $45 and reduce T by $10.
B) raise G by $40 and reduce T by $30.
C) raise G by $30 or reduce T by $40.
D) raise both G and T by $40.

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