QUESTIONS 33 THROUGH 44 RELATE TO ECONOMICS

39. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2012
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2012
39. In a simple economy with no foreign sector, the following equations apply: Consumption function C = 2,500 + 0.80 × (Y – T)Investment function I = 500 + 0.30 × Y – 25 × rGovernment spending G = 1,000Tax function T = –250 + 0.30 × YY: Aggregate income r: Real interest rateIf the real interest rate is 3% and government spending increases to 2,000, the increase in aggregate income will be closest to: A. 1,000. B. 1,163. C. 7,143.