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Suppose the marginal propensity to consume

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Question

Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent of GDP. The spending multiplier for this economy is equal to _____.

a. 0.54

b. 0.80

c. 1.25

d. 1.41

e. 1.85

Reference no: EM132336361

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