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An Economy Has No Imports and No Taxes

Question 391

Multiple Choice

An economy has no imports and no taxes. The marginal propensity to save is 0.1. A increase in autonomous expenditure increases equilibrium expenditure by $60 billion and the multiplier is _ .


A) $6 billion; 10
B) $60 billion; 5
C) $60 billion; 10
D) $12 billion; 5

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