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QUESTION
2. Consider the Keynesian cross model and suppose taxes increase by $500 million. If MPC = 0.8, how does output change?
2. Consider the Keynesian cross model and suppose taxes increase by $500 million. If MPC = 0.8, how does output change?
A. Output increases by $2000 million
B. Output decreases by $2000 million
C. Output increases by $2500 million
D. Output decreases by $2500 million
