Multiple Choice
Assuming the MPC is .75, an equal $10 billion increases in government spending and tax collections will:
A) leave the equilibrium GDP unchanged.
B) increase the equilibrium GDP by $10 billion.
C) increase the equilibrium GDP by $2.5 billion.
D) reduce the equilibrium GDP by $10 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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