Multiple Choice
The MPC = .8. Taxes are reduced by $5 million. What is the maximum potential impact on GDP after the full multiplier effect?
A) It decreases by $20 million.
B) It decreases by $25 million.
C) It increases by $20 million.
D) It increases by $25 million.
Correct Answer:
Verified
Correct Answer:
Verified
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