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If Income Increases by $10,000,government Purchases Are Fixed at $1,000,investment

Question 123

Multiple Choice

If income increases by $10,000,government purchases are fixed at $1,000,investment spending is fixed at $2,000,net exports are fixed at $500,and the marginal propensity to consume is 0.70,by how much does aggregate expenditure increase?


A) $700
B) $2,000
C) $7,000
D) $1,000
E) $1,400

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