Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $32,000, what will the new equilibrium level of GDP be if government spending increases to 2,500?
C = 5,000 + (MPC)Y
I = 1,500
G = 2,000
NX = -500
A) $32,500 B) $34,000 C) $38,000 D) $42,000
B
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