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An Increase in Government Expenditures by $100 (Unmatched by an Increase

Question 151

Multiple Choice

An increase in government expenditures by $100 (unmatched by an increase in taxes) would, if the MPC = 0.90, result in an increase in real GDP by:

A) $1,000.
B) $9,000.
C) $900.
D) $190.
E) inadequate information is given.

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