Assume that a GDP gap can be closed by a $200 initial change in planned spending.The MPS is 0.3 and the MPI equals 0.1.If the economy is currently in equilibrium with an income level of $600, potential GDP equals:
A) $1, 600.
B) $1, 100.
C) $800.
D) $600.
E) $400.
Correct Answer:
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