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Assume the Marginal Propensity to Consume (MPC) Is 0

Question 136

Multiple Choice

Assume the marginal propensity to consume (MPC) is 0.75 and the government cuts taxes by $250 billion. The aggregate demand curve will shift to the:

A) right by $1,000 billion.
B) right by $750 billion.
C) left by $1,000 billion.
D) left by $750 billion.

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