Multiple Choice
If the marginal propensity to save is 0.25, investment spending is $700 million, and the government increases its purchases of goods and services by $100 million, then real GDP increases by:
A) $25 million.
B) $175 million.
C) $400 million.
D) $2,800 million.
Correct Answer:
Verified
Correct Answer:
Verified
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