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The Equilibrium Level of Real GDP Is $1,000, the Target

Question 100

Multiple Choice

The equilibrium level of real GDP is $1,000, the target level of real GDP is $1,250, and the marginal propensity to consume (MPC) is 0.60. The target can be reached if government spending is:


A) increased by $60 billion.
B) increased by $100 billion.
C) increased by $250 billion.
D) held constant.

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