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Suppose Households Save $30 Billion More at Each Level of Income

Question 115

Multiple Choice

Suppose households save $30 billion more at each level of income, and the MPC = 0.9.How will the aggregate expenditure line be affected?  


A)  It will shift upward by $30 billion. 
B)  It will shift downward by $30 billion. 
C)  It will shift upward by $300 billion because of the multiplier. 
D)  It will shift downward by $300 billion because of the multiplier.

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