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If a $20 Billion Increase in Government Expenditures Increases Equilibrium

Question 113

Multiple Choice

If a $20 billion increase in government expenditures increases equilibrium GDP by $50 billion, then

A) the multiplier is 2.
B) the MPC for this economy is 0.6.
C) inflation is occurring.
D) the MPS for this economy is 0.6.

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