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Suppose the Marginal Propensity to Consume (MPC) Is 0

Question 415

Multiple Choice

Suppose the marginal propensity to consume (MPC) is 0.8 and there is a $1,000 increase in autonomous consumption. Given this information, real GDP will increase by


A) $1,600.
B) $2,000.
C) $2,500.
D) $5,000.

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