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An economy has a fixed pricelevel, noimports, and no income taxes. An increase in autonomous expenditure of $5 trillion increases equilibrium expenditure by $25 trillion.
An economy has a fixed pricelevel, noimports, and no income taxes.
An increase in autonomous expenditure of $5 trillion increases equilibrium expenditure by $25 trillion.
The multiplier is 5. What is the marginal propensity to consume?
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