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Suppose That an Increase in Government Purchases of $100 Million

Question 159

Multiple Choice

Suppose that an increase in government purchases of $100 million caused the aggregate demand curve to shift to the right by $350 million at each price level. What is the value of the multiplier?


A) 2.5
B) 3.5
C) 0.285
D) $250 million

Correct Answer:

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