Assume General Motors has decided to build an assembly plant in St. Louis. The plant will employ 1,000 full-time workers at an annual wage of $40,000 each. If the marginal propensity to consume in St. Louis is 2/3, what change in income will result from operation of the plant for one year?
A. $26.7 million.
B. $40 million.
C. $80 million.
D. $120 million.
Answer: D
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