Multiple Choice
The MPC is 0.90 and there are no income taxes or imports.If government expenditures on goods and services increases by $2.0 billion, after the multiplier effect works out, aggregate expenditure increases by
A) $1.8 billion.
B) $2.22 billion.
C) $10 billion.
D) $20 billion.
E) $2.0 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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