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If the Marginal Propensity to Consume Is 0

Question 171

Multiple Choice

If the marginal propensity to consume is 0.75,net taxes are fixed at $2,000 and real income rises by $12,000,by how much will real consumption spending increase?


A) $9,000
B) $8,000
C) $7,500
D) $7,000
E) $10,000

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