Multiple Choice
If the MPC is 0.8, the net income tax rate is 0.2, the marginal propensity to import is 0.04 and the government increases spending by $100 million, then we would expect GDP to increase by:
A) $227.27 million.
B) $250.00 million.
C) $400.00 million.
D) $500.00 million.
Correct Answer:
Verified
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