Neco 2023 Economics Question 9

Practice objective / multiple choice question 9 from the 2023 Neco Economics examination.

Neco 2023 Economics Objective / Multiple Choice Medium Difficulty
Question 9 NECO • 2023 • ECONOMICS • objective

In an economy, consumption is \(C = 200 + 0.75(Y - T)\), investment \(I = 150\), government spending \(G = 100\), and taxes are proportional \(T = 0.2Y\). Net exports are zero. (a) Find the equilibrium level of national income \(Y\). (b) Compute the fiscal multiplier.

Answer Options

A. Equilibrium income Y = 1250; Fiscal multiplier = 3.0.
B. Equilibrium income Y = 1000; Fiscal multiplier = 2.0.
Correct Answer C. Equilibrium income Y = 1125; Fiscal multiplier = 2.5.
D. Equilibrium income Y = 1500; Fiscal multiplier = 2.8.
Correct Answer
C
Correct Option:
Equilibrium income Y = 1125; Fiscal multiplier = 2.5.

About This Question

This is Neco 2023 Economics Question 9. It is one of the objective questions from the 2023 Neco Economics examination.

Difficulty level: Medium .

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