Assume that people experience a one-time 50 unit increase in their con
Assume that people experience a one-time 50 unit increase in their consumption (i.e. the intercept of the consumption function increases by 50). In this case
a. equilibrium income will rise by 50 units times the investment multiplier.
b. equilibrium income will rise by 50 units.
c. equilibrium income will rise by 50 units times the tax multiplier.
d. equilibrium income will not change because this increase is temporary.
ANSWER
A
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