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If Government Expenditures Increase by $20 Billion and Equilibrium GDP

Question 135

Multiple Choice

If government expenditures increase by $20 billion and equilibrium GDP increases by $50 billion as a result, we can conclude that:

A) the expenditures multiplier is 2.
B) the MPC for this economy is .6.
C) inflation is occurring.
D) the MPS for this economy is .6.

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