If Government Increases Its Purchases by $15 Billion and the MPC

question 193

Multiple Choice

If government increases its purchases by $15 billion and the MPC is 2/3, then we would expect the equilibrium GDP to

• A)increase by $30 billion.
• B)increase by $45 billion.
• C)decrease by $35 billion.
• D)increase by $50 billion.

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