Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9, a net tax rate of 0.3 and a marginal propensity to import of 0.3. Economy B has a marginal propensity to consume of 0.9, a net tax rate of 0.1 and a marginal propensity to import of 0.3. Suppose there is an increase in autonomous investment of $5 billion in each of these economies. Which of the following statements is true? Group of answer choices There is a larger decrease in real GDP in Economy A as a result of the change in autonomous investment. There is a larger increase in real GDP in Economy B as a result of the change in autonomous investment. There is a larger increase in real GDP in Economy A as a result of the change in autonomous investment. There is an equal effect on real GDP in Economies A and B as a result of the increase in autonomous investment. There is a larger decrease in real GDP in Economy B as a result of the change in autonomous investment.
Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9, a net tax rate of 0.3 and a marginal propensity to import of 0.3. Economy B has a marginal propensity to consume of 0.9, a net tax rate of 0.1 and a marginal propensity to import of 0.3. Suppose there is an increase in autonomous investment of $5 billion in each of these economies. Which of the following statements is true?
Group of answer choices
There is a larger decrease in real
There is a larger increase in real GDP in Economy B as a result of the change in autonomous investment.
There is a larger increase in real GDP in Economy A as a result of the change in autonomous investment.
There is an equal effect on real GDP in Economies A and B as a result of the increase in autonomous investment.
There is a larger decrease in real GDP in Economy B as a result of the change in autonomous investment.
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