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An Economy Has No Imports or Income Taxes

Question 178

Multiple Choice

An economy has no imports or income taxes.The MPC is 0.75 and real GDP is $120 billion.Businesses increase investment by $4 billion.The multiplier is ________ and the change in real GDP from the increase in investment is ________ billion.


A) 4;$16
B) 5;$16
C) 4;$25
D) 5;$25
E) 0.75;$3

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