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Suppose That Investment Increases by $10 Billion

Question 167

Multiple Choice

Suppose that investment increases by $10 billion. Which one of the following would reduce the effect of this increase in autonomous expenditure on equilibrium real GDP in the short run?


A) an increase in the marginal propensity to consume
B) a decrease in the marginal propensity to import
C) a decrease in the marginal tax rate
D) a steeper short-run aggregate supply curve
E) a flatter short-run aggregate supply curve

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