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Calculate the Government Purchases Multiplier If the Marginal Propensity to Consume

Question 82

Multiple Choice

Calculate the government purchases multiplier if the marginal propensity to consume equals 0.80, the tax rate is 0.10, and the marginal propensity to import equals 0.20.


A) 2.10
B) 1.90
C) 1.70
D) 1.40

Correct Answer:

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