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If Policy Makers Want to Increase Real GDP by $100

Question 328

Multiple Choice

If policy makers want to increase real GDP by $100 billion and the marginal propensity to consume is 0.75, they should _____ government purchases of goods and services by _____ .


A) increase; $25 billion
B) increase; $33 billion
C) increase; $100 billion
D) decrease; $100 billion

Correct Answer:

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