Multiple Choice
Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.80. An increase in government spending of $1 billion would result in an increase in GDP of:
A) $0.
B) $0.8 billion.
C) $1.0 billion.
D) $5.0 billion.
E) $8.0 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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