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    Essentials of Economics Study Set 4
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    Exam 12: Fiscal Policy
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    If the Multiplier Is 5 and Defense Expenditures Decrease by $40
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If the Multiplier Is 5 and Defense Expenditures Decrease by $40

Question 21

Question 21

Multiple Choice

If the multiplier is 5 and defense expenditures decrease by $40 million,aggregate demand decreases by a total of:


A) $8 million.
B) $20 million.
C) $40 million.
D) $200 million.

Correct Answer:

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