Multiple Choice
In the Keynesian-cross model, if the MPC equals 0.75, then a $2 billion increase in government spending increases planned expenditures by _____ and increases the equilibrium level of income by _____.
A) $2 billion; $4 billion
B) $0.75 billion; $1 billion
C) $0.75 billion; $0.75 billion
D) $1 billion; $4 billion
Correct Answer:
Verified
Correct Answer:
Verified
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