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Dollar for Dollar, the Government Spending Multiplier

Question 30

Multiple Choice

Dollar for dollar, the government spending multiplier


A) is larger than the investment multiplier.
B) is smaller than the investment multiplier.
C) is always identical to the investment multiplier in the simple Keynesian model.
D) can be larger or smaller than the investment multiplier depending on the marginal propensity to consume.
E) can be larger or smaller than the investment multiplier depending on the rate at which income is taxed.

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