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Suppose That the Marginal Propensity to Consume (MPC)is

Question 377

Multiple Choice

Suppose that the marginal propensity to consume (MPC) is .75 and there is an increase in investment spending of $100,000. As a result, equilibrium real Gross Domestic Product (GDP) would increase by


A) $75,000.
B) $100,000.
C) $400,000.
D) $750,000.

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