Answer the question on the basis of the following information for a hypothetical economy.All values are in nominal terms. M = $100
V = 2
C_a = $160
X_n = $10
G = $10
Refer to the given information.In equilibrium,I_g is:

Question

Quizplus · Accepted Answer

In equilibrium, the nominal GDP (Y) is given by the equation MV = Y, where M is the money supply and V is the velocity of money. Here, Y = $100 * 2 = $200. The GDP is also the sum of consumption (C), investment (I_g), government spending (G), and net exports (X_n). Given C_a = $160, X_n = $10, and G = $10, we have $200 = $160 + I_g + $10 + $10. Solving for I_g, we get I_g = $20.

Answer the Question on the Basis of the Following Information