Use the Aggregate Expenditures Model and Assume the Marginal Propensity

question 11

Multiple Choice

Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.80. An increase in government spending of $1 billion would result in an increase in GDP of:

• A) $0.8 billion.
• B) $1.0 billion.
• C) $5.0 billion.
• D) $8.0 billion.

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RFP

Request for Proposal; a document that announces and provides details about a project, inviting suppliers to bid to complete it.

Latitude

The angular distance of a place north or south of the earth's equator, typically expressed in degrees and minutes.

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