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    Economics Study Set 11
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    Exam 31: The Aggregate Expenditures Model
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    If the MPC in an Economy Is 0
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If the MPC in an Economy Is 0

Question 86

Question 86

Multiple Choice

If the MPC in an economy is 0.75 and aggregate expenditures increase by $5 billion, then equilibrium GDP will increase by


A) $3.75 billion.
B) $6.7 billion.
C) $8.75 billion.
D) $20 billion.

Correct Answer:

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