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    Macroeconomics Study Set 57
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    Exam 11: Aggregateexpenditures
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    If the MPC Is 0
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If the MPC Is 0

Question 13

Question 13

Multiple Choice

If the MPC is 0.9, and the government cuts spending by $200 billion, the overall effect on GDP will be:


A) a decrease of $2,000 billion.
B) an increase of $2,000 billion.
C) a decrease of $1,800 billion.
D) an increase of $180 billion.

Correct Answer:

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