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If Government Spending Increased by $200 Billion and the MPC

Question 36

Multiple Choice

If government spending increased by $200 billion and the MPC within the economy was 0.9, what would be the total impact on real GDP?


A) ​$180 billion increase
B) ​$222 billion increase
C) ​$380 billion increase
D) ​$2.0 trillion increase

Correct Answer:

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