Multiple Choice
When an economy is operating well below its full-employment capacity and the marginal propensity to consume is 0.75, a $10 billion increase in investment spending will cause the equilibrium output to rise by:
A) $5 billion.
B) $10 billion.
C) $20 billion.
D) $40 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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