If Autonomous Spending Rises by $8 Billion and the MPC

question 64

Multiple Choice

If autonomous spending rises by $8 billion and the MPC = .75, what is the maximum potential impact on GDP after the full multiplier effect?

• A) It increases by $32 billion.
• B) It increases by $64 billion.
• C) It decreases by $16 billion.
• D) It decreases by $10.5 billion.

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