If Equilibrium Income Is $500 Billion, MPC = 0

question 110

Multiple Choice

If equilibrium income is $500 billion, MPC = 0.8, MPI = 0.2 and autonomous government spending increases by $20 billion, the new equilibrium income will be _____.

• A)$600 billion.
• B)$550 billion.
• C)$525 billion.
• D)$520 billion.
• E)$500 billion.

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