Multiple Choice
Let AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment,
G =Government Purchases. Consider a simple aggregate expenditures model, where
AE = C + IP + G and all components of aggregate expenditures except consumption are autonomous. If the MPS is 0.4, then the multiplier is
A) 1.33
B) 2.5
C) 5
D) 15
Correct Answer:
Verified
Correct Answer:
Verified
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