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If the MPC is 0.5 and the government increases spending by $250 billion, which of the following will be the effect this change has on

If the MPC is 0.5 and the government increases spending by $250 billion, which of the following will be the effect this change has on the economy?

  • The economy will increase by $500 billion.
  • The economy will increase by $350 billion.
  • The economy will increaseby $125 billion.
  • The economy will increase by $250 billion.

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