Use the Following Situation to Answer the Question : Situation

question 11

Multiple Choice

Use the following Situation to answer the question : situation 20-2 Assume a closed economy. Suppose that autonomous consumption equals $400, planned investment equals $500, government expenditure equals $200, net taxes equals $50, and the mpc equals 0.9.

-Using the information in situation 20-2,if government spending increases by $100,then the equilibrium aggregate output will change by

• A)-$1,000.
• B)-$100.
• C)$100.
• D)$1,000.

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Definitions:

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