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Suppose that the linear equation for consumption in a hypothetical economy is given as C = 540 + 0.4Y (where C is the consumption and

Suppose that the linear equation forconsumptionin a hypothetical economy is given as

C = 540 + 0.4Y (where C is the consumption and Y is the income). If MPM is given as 0.2, theopen economy multiplierin this economy will be

A.4

B.5

C.5.2

D.1.25

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