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Assume That Initially G Is $100 and Equilibrium Real GDP

Question 107

Multiple Choice

Assume that initially G is $100 and equilibrium real GDP demanded is $1,000.Suppose the multiplier is 4 and G increases to $200.By what amount will real GDP demanded increase?  


A)  by $100 
B)  by $1,000 
C)  by $1,400 
D)  by $2,000

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