The MPC is 0.90 and there are no income taxes or imports.If government expenditures on goods and services increase by $2.0 billion,after the multiplier effect works out,aggregate expenditure increases by
A)$1.8 billion.
B)$2.0 billion.
C)$2.22 billion.
D)$20 billion.
E)$10 billion.

Question

Quizplus · Accepted Answer

The Answer of The MPC is 0.90 and there are no income taxes or imports.If government expenditures on goods and services increase by $2.0 billion,after the multiplier effect works out,aggregate expenditure increases by
A)$1.8 billion.
B)$2.0 billion.
C)$2.22 billion.
D)$20 billion.
E)$10 billion.

The MPC Is 0