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Assume That the Economy Is at Equilibrium at $12 Trillion

Question 144

Multiple Choice

Assume that the economy is at equilibrium at $12 trillion, with a marginal propensity to consume of 0.75. If exports rise by $0.1 trillion and imports increase by $0.1 trillion, equilibrium income will


A) fall by $0.1 trillion.
B) rise by $0.1 trillion.
C) fall by $0.4 trillion.
D) not change.

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