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Assume the Economy Is in Recession, the MPC Is 0

Question 55

Multiple Choice

Assume the economy is in recession, the MPC is 0.80, and an increase of $200 billion in spending is needed in order to reach full employment. The target can be reached if government spending is increased by:


A) $20 billion.
B) $200 billion.
C) $80 billion.
D) $40 billion.

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