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If Policy Makers Want to Decrease Real GDP by $100

Question 173

Multiple Choice

If policy makers want to decrease real GDP by $100 billion and the marginal propensity to consume is 0.6, they should _____ government purchases of goods and services by _____ .


A) decrease; $100 billion
B) decrease; $60 billion
C) decrease; $40 billion
D) increase; $100 billion

Correct Answer:

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