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Government Purchases Rise by $100 Billion and the MPC Is

Question 11

Multiple Choice

Government purchases rise by $100 billion and the MPC is equal 0.75.Assuming that idle resources exist at each expenditure round,and the multiplier is operative,the change in Real GDP equals


A) $40 billion.
B) $75 billion.
C) $400 billion.
D) $750 billion.
E) $250 billion.

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