If the marginal propensity to expend is equal to .6, the interest rate sensitivity of investment is equal to $100 billion, the interest rate sensitivity of the exchange rate is 10, and the exchange rate sensitivity of exports is $7 billion, a one percentage point change in the real interest rate will change the level of aggregate demand by
A) $170 billion.
B) $425 billion.
C) -$425 billion.
D) -$170 billion.
Correct Answer:
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