-The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. The equilibrium level of real GDP is
A) $700 billion.
B) $900 billion.
C) $800 billion.
D) $500 billion.
E) $100 billion.

Question

-The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. The equilibrium level of real GDP is
A) $700 billion. 
B) $900 billion. 
C) $800 billion. 
D) $500 billion. 
E) $100 billion.

Quizplus · Accepted Answer

The equilibrium level of real GDP in an economy is where aggregate demand equals aggregate supply, or where planned spending equals actual output. Without the specific table data, the general principle is that equilibrium is found where the components of GDP (consumption, investment, government spending, and net exports - which are zero in this case as there are no imports or exports) sum to a level of GDP where the economy does not have the tendency to expand or contract. Since the correct answer is provided as C, it implies that at $800 billion, these conditions are met in the hypothetical scenario for Mouseville.

-The Above Table Gives Data for the Nation of Mouseville