Multiple Choice
Assume that taxes depend on income. The MPC is 0.75 and t is 0.2. If government spending increases by $10 billion, the equilibrium level of output will increase by
A) $16.7 billion.
B) $25 billion.
C) $50 billion.
D) $100 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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