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(Advanced Analysis)Assume That the MPS Is

Question 8

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(Advanced analysis) Assume that the MPS is .33 in an economy that has an aggregate supply curve with a slope of 1.An increase in investment spending of $10 billion will shift the aggregate demand curve rightward by:


A) $30 billion and increase real GDP by $15 billion.
B) $30 billion and increase real GDP by $30 billion.
C) $10 billion and increase real GDP by $30 billion.
D) $10 billion and increase real GDP by $10 billion.

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