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If the Marginal Propensity to Consume Is 0

Question 184

Multiple Choice

If the marginal propensity to consume is 0.8, full-employment output is $14 trillion, and current output is $13.5 trillion, then investment spending must _____ to reach full-employment output.


A) decrease by $0.5 trillion
B) increase by $0.1 trillion
C) increase by $0.4 trillion
D) increase by $0.5 trillion

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