contestada

GDP Consumption
$440 $450
490 490
540 530
590 570
640 610
Refer to the accompanying consumption schedule in an economy. All figures are in billions of dollars. If gross investment is $34 billion, net exports are zero, and there is a lump-sum tax of $30 billion at all levels of GDP, then the after-tax equilibrium level of GDP will be

$590 billion.

$540 billion.

$490 billion.

$640 billion.

Respuesta :

saqib097

Answer:

The answer is B, $540 Billion.

Answer: The answer is $490 billion

Explanation:

In a two sector model of National income

Y = C + I, or Yd = C + S

Where Y = National income, C = consumption , I = investment, Yd = disposable income, S = savings

In the question, tax is said to be a lump sum, which indicate that the tax is constant at all level of GDP. Therefore, the after tax equilibrium level of GDP is 490 billion , with reference to the consumption schedule where consumption of 490 billion is equal to disposable income of 490 billion.

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