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If the Marginal Propensity to Consume (MPC) Is 0

Question 56

Multiple Choice

If the marginal propensity to consume (MPC) is 0.75 and if policy makers wish  to increase real GDP by $300 million to fight a recession, then by how much  would taxes have to change?


A)  -$30 million
B)  -$50 million
C) -100 million
D) -300 million

Correct Answer:

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