Please show your work

C = 300 + 0.8Yd; C = consumption function; Yd (Y-T) = disposable income I = 200; I = Investment G = 400; G = Government expenditure T = 200; T = Tax revenue Also assume that Yf = Full employment GDP (Potential GDP) = 5,000

The government spending needed to bridge the GDP gap you found in statement 8.7 above

would be _____________

Hint: It is also called recessionary or inflationary gap depending on whether the economy is in

state of recession or inflation.

a. 400

b. 350

c. 260

d. 250