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Determining the marginal propensity

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In the simple Keynesian model with no government and foreign sectors, assume that full employment occurs at an output of $10,000. With a marginal propensity to consume of 0.5 and equilibrium output at $9,600, by how much will investment spending have to increase to move the economy to full employment?

  • $100
  • $400
  • $200
  • $50

Reference no: EM131088340

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