Income Consumption

$200 $240

$400 $400

$600 $560

$800 $720

$1,000 $880

The table above shows the income and consumption data for Jamestown. If the government increases spending by $100 and increases taxes by $100 to balance the budget, what is the value of the government spending multiplier and the impact on Jamestown's gross domestic product?

Spending Multiplier / Gross Domestic Product

2 / Increase by $200

2 / Remain the same

5 / Increase by $500

5 / Remain the same

5 / Increase by $100