If a $20 Billion Increase in Government Expenditures Increases Equilibrium

question 113

Multiple Choice

If a $20 billion increase in government expenditures increases equilibrium GDP by $50 billion, then

• A)the multiplier is 2.
• B)the MPC for this economy is 0.6.
• C)inflation is occurring.
• D)the MPS for this economy is 0.6.

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