If the MPC is 0.8 and investment increases by $5 billion, the equilibrium GDP will Multiple Choice increase by $25 billion. increase by $4.0 billion. decrease by $6.25 billion. increase by $6.25 billion.

If the MPC is 0.8 and investment increases by $5 billion, the equilibrium GDP will Multiple Choice increase by $25 billion. increase by $4.0 billion. decrease by $6.25 billion. increase by $6.25 billion.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter21: Fiscal Policy

Section: Chapter Questions

Problem 4SQ

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Question

If the MPC is 0.8 and investment increases by $5 billion, the equilibrium GDP will

Multiple Choice

increase by $25 billion.
increase by $4.0 billion.
decrease by $6.25 billion.
increase by $6.25 billion.

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