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If the Marginal Propensity to Consume Is 0

Question 121

Multiple Choice

If the marginal propensity to consume is 0.75 and government spending decreases by $2,000 billion,what is the change in GDP?

A) -$2,000 billion
B) -$8,000 billion
C) $2,000 billion
D) $1,500 billion
E) $8,000 billion

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