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Using the Keynesian Cross, If Autonomous Consumption Is $300 and Investment

Question 2

Multiple Choice

Using the Keynesian cross, if autonomous consumption is $300 and investment is $200, and the marginal propensity to consume is 0.9, while government spending, net exports and taxes are zero, then equilibrium output is


A) $450.
B) $500.
C) $5,000.
D) $950.

Correct Answer:

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