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    Macroeconomics Principles
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    Exam 8: Aggregate Expenditures
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    If the Multiplier Is 2 and Investment Spending Falls by $5
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If the Multiplier Is 2 and Investment Spending Falls by $5

Question 244

Question 244

Multiple Choice

If the multiplier is 2 and investment spending falls by $5 billion, then equilibrium income:


A) increases by $10 billion.
B) increases by $2.5 billion.
C) decreases by $5 billion.
D) decreases by $10 billion.

Correct Answer:

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