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Suppose the MPC and MPI in the economy in Figure 10.2 equal 0.9 and 0.1 respectively and the shift from ADo to AD, was caused
Suppose the MPC and MPI in the economy in Figure 10.2 equal 0.9 and 0.1 respectively and the shift from ADo to AD, was caused by a decrease in investment of $30 billion. What will the total decrease in aggregate demand be (i.e. ADo to AD2) as a result of the initial $30 billion decrease? Take Test: Final A. $37.5 billion. B. $130 billion. C. $150 billion. D. $240 billion
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