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28-10-2020
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If the marginal propensity to consume is 0.8, by how much will GDP increase after government spending increases by $200

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coens04 coens04

28-10-2020

Answer:

If disposable income increases by $5 billion and consumer spending ... spending by $100 billion and the marginal propensity to consume is 0.8. ... Suppose investment spending increases by $50 billion, and as a result real GDP increases by $200 billion. ... deliberate changes in taxation and/or government spending.

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