Multiple Choice
Suppose that taxes collected by the government could be represented by T = 100 + 0.2Y. If the marginal propensity to consume were 0.9, then an increase in GDP of $100 would cause consumption to
A) increase by $172.
B) fall by $20.
C) increase by $72.
D) increase by $80.
E) increase by $100.
Correct Answer:
Verified
Correct Answer:
Verified
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