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If the MPS in an economy is .1, government could shift the aggregate demand curve rightward by $40 billion by:

A)
increasing taxes by $4 billion.
B)
increasing government spending by $40 billion.
C)
decreasing taxes by $4 billion.
D)
increasing government spending by $4 billion.

FOORQUIZ ANSWER:

D)
increasing government spending by $4 billion.

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