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If the Marginal Propensity to Consume Is 0

Question 215

Multiple Choice

If the marginal propensity to consume is 0.75 and government purchases of goods and services decrease by $30 billion, real GDP will:

A) increase by $30 billion.
B) increase by $22.5 billion.
C) decrease by $30 billion.
D) decrease by $120 billion.

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