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 expenditure multiplier is ________ and the change in real GDP from the increase in investment is ________ billion.
A) 5; $25
B) 4; $16
C) 5; $16
D) 4; $25
E) 0.75; $3
Correct Answer:
Verified
Correct Answer:
Verified
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