In the Keynesian AE Model,if the Autonomous Components of Consumption,investment,government

question 143

Multiple Choice

In the Keynesian AE model,if the autonomous components of consumption,investment,government spending,and net export spending initially total $200 billion,and the MPS is 0.2,by how much will equilibrium output change if governments increase their spending by $5 billion?

• A)by $1 billion
• B)by $5 billion
• C)by $10 billion
• D)by $25 billion

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