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During the Y2K Scare of 2000, Rufus Reduced His Monthly

Question 52

Multiple Choice

During the Y2K scare of 2000, Rufus reduced his monthly spending by $1,000 and buried his money in the backyard. If the marginal propensity to consume is 0.75, by how much did national income fall?


A) $0
B) $1,000
C) $4,000
D) It increased by $4,000.

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