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(Advanced Analysis)Answer the Question on the Basis of the Following

Question 9

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(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy.The letters Y,Ca,Ig,Xn,G,and T stand for GDP,consumption,gross investment,net exports,government purchases,and net taxes respectively.Figures are in billions of dollars. Ca=25+0.75(YT) Ig=Ig0=50Xn=Xn0=10G=G0=70T=T0=30\begin{aligned}C _ { a } & = 25 + 0.75 ( Y - T ) \\I _ { g } & = I _ { g 0 } = 50 \\X _ { n } & = X _ { n 0 } = 10 \\G & = G _ { 0 } = 70 \\T & = T _ { 0 } = 30\end{aligned} Refer to the information.If the economy's tax schedule was T = .2Y rather than T = T0 = 30,the equilibrium GDP would be:


A) $387.5.
B) $518.5.
C) $316.
D) $412.

Correct Answer:

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