In an economy where the only leakage economy is saving, the marginal propensity to consume for the economy is 0.8. If government spending in the economy increases by $200, then the overall spending in the economy will _____ by:
A) increase; $800.
B) decrease; $800.
C) increase; $1,000.
D) decrease; $1,000.

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The Answer of In an economy where the only leakage economy is saving, the marginal propensity to consume for the economy is 0.8. If government spending in the economy increases by $200, then the overall spending in the economy will _____ by:
A) increase; $800.
B) decrease; $800.
C) increase; $1,000.
D) decrease; $1,000.

In an Economy Where the Only Leakage Economy Is Saving