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The Government Buys a Bridge

Question 72

Multiple Choice

The government buys a bridge. The owner of the company that builds the bridge pays her workers. The workers increase their spending. Firms that the workers buy goods from increase their output. What does this type of effect on spending illustrate?


A) the multiplier effect
B) the crowding-out effect
C) the marginal propensity to consume effect
D) the investment accelerator effect

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