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Suppose the Marginal Propensity to Consume (MPC)is 0

Question 297

Multiple Choice

Suppose the marginal propensity to consume (MPC) is 0.8 and there is a $4,000 increase in planned investment. Given this information, real GDP will increase by


A) $4,000.
B) $20,000.
C) $5,000.
D) $2,000.

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