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In an Economy, the Government Wants to Increase Aggregate Demand

Question 383

Multiple Choice

In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government
Spending by


A) $10 billion.
B) $20 billion.
C) $31.25 billion.
D) $40.50 billion.

Correct Answer:

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