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(18049) Suppose the MPC is 0.75. There are no crowding out or investment accelerator effects. If the government increases its expenditures by $200 billion, then by how much does aggregate demand shift to the right? If the government decreases taxes by $200 billion, then by how far does aggregate demand shift to the right?
A. $800 billion and $800 billion
B. $800 billion and $600 billion
C. $600 billion and $600 billion
D. $600 billion and $450 billion
