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Suppose Investment Falls by $200 and Equilibrium Output Falls by $500

Question 87

Multiple Choice

Suppose investment falls by $200 and equilibrium output falls by $500. Given this information, we know that:


A) the marginal propensity to consume = 0.9.
B) the marginal propensity to consume = 0.75.
C) the marginal propensity to consume = 0.8.
D) none of the above

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