If Autonomous Investment Increases by 100 and Government Purchases Decrease

question 26

Multiple Choice

If autonomous investment increases by 100 and government purchases decrease by 100, which of the following is true?

• A)income will increase by 100
• B)income will increase by 200
• C)income will increase by the multiplier times 100
• D)income will decrease by the multiplier times 100
• E)income will not change

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