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Business, 26.11.2019 02:31 Squara

The multiplier effect of fiscal policy predicts that an increase in government spending of $250 billion will increase total income by $833.33 billion if the marginal propensity to consume is 0.70.

if we account for crowding-out, then the increase in aggregate demand will be: a. more than $833.33 billion. b. less than $833.33 billion. c. exactly $833.33 billion.

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