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    Principles of Macroeconomics Study Set 12
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    Exam 8: Aggregate Expenditure and Equilibrium Output
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    Assume There Is No Government or Foreign Sector
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Assume There Is No Government or Foreign Sector

Question 134

Question 134

Multiple Choice

Assume there is no government or foreign sector. If the multiplier is 4, a $20 billion increase in investment will cause aggregate output to increase by


A) $5 billion.
B) $20 billion.
C) $40 billion.
D) $80 billion.

Correct Answer:

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