Real GDP (dollars) 3,0004,0005,0006,0007,0008,000 Consumption expenditure (dollars) 2,5003,2504,0004,7505,5006,250 Investment (dollars) 500500500500500500 Government expenditure (dollars) 500500500500500500 -In the above table, there are no taxes and no imports or exports. Suppose that investment increases from $500 to $750 at each level of real GDP. After the increase, what is the level of planned expenditure when real GDP equals $5,000?
A) $1,000 B) $5,000 C) $250 D) $5,250
Correct Answer:
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