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An Economy Has No Imports or Income Taxes

Question 71

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 new level of real GDP is


A) $140 billion.
B) $132 billion.
C) $136 billion.
D) $124 billion.
E) $128 billion.

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