Multiple Choice
If the MPC is 5/6 then the multiplier is
A) 6/5,so a $200 increase in government spending increases aggregate demand by $240.
B) 5,so a $200 increase in government spending increases aggregate supply by $1000.
C) 6,so a $200 increase in government spending increases aggregate demand by $1200.
D) 6/5,so a $200 increase in government spending increases aggregate supply by $1200.
Correct Answer:
Verified
Correct Answer:
Verified
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