Multiple Choice
Assume that taxes depend on income. The MPC is 0.8 and t is 0.4. If government purchases increase by $100 billion, the equilibrium level of output will increase by
A) $16.7 billion.
B) $57.5 billion.
C) $192.31 billion.
D) $215.9 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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