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    Exam 10: Basic Macroeconomic Relationships
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    If the Marginal Propensity to Save Is 0
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If the Marginal Propensity to Save Is 0

Question 45

Question 45

Multiple Choice

If the marginal propensity to save is 0.2 in an economy, a $20 billion rise in investment spending will increase


A) GDP by $120 billion.
B) GDP by $20 billion.
C) saving by $25 billion.
D) consumption by $80 billion.

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