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Suppose Planned Investment Increases by $200 Billion and the Marginal

Question 135

Multiple Choice

Suppose planned investment increases by $200 billion and the marginal propensity to consume equals 0.80.By what amount will the aggregate expenditure line shift upward at every level of real GDP?  


A)  by $40 billion 
B)  by $160 billion 
C)  by $200 billion 
D)  by $250 billion

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