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29-04-2024
Business

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Suppose that nation A has a marginal propensity to consume of 0.75, while nation B has a marginal propensity to consume of 0.60. Suppose that nation A and nation B both increase aggregate taxes by $1 million. Which of the following statements is true?
O Nation B will experience a larger decrease in real GDP.
O Nation A will experience a larger decrease in real GDP.

Answer :

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