Multiple Choice
In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, suppose when autonomous aggregate expenditures rise by $500 billion, equilibrium real GDP increases by $2,500 billion. Which of the following statements is true?
A) The MPS = 0.8.
B) The MPC = 0.2
C) The MPS = 0.2.
D) The MPC = 5.
Correct Answer:
Verified
Correct Answer:
Verified
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