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Suppose Investment Increases by $200 and That the Equilibrium Level

Question 59

Multiple Choice

Suppose investment increases by $200 and that the equilibrium level of output rises by $400. Given this information, we know that:


A) the marginal propensity to save = 0.4.
B) the marginal propensity to save = 0.1.
C) the marginal propensity to save = 0.25.
D) the marginal propensity to save = 0.5.

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