Economics 9708 · AS & A Level · Aggregate demand and aggregate supply

Aggregate demand and aggregate supply — practice question

In a two sector economy, autonomous consumption expenditure rises by $100 billion, autonomous investment expenditure rises by $200 billion, and the marginal propensity to consume is 0.5. What increase in National Income will result?

  • A$150 billion
  • B$300 billion
  • C$450 billion
  • D$600 billion

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