Suppose that in an economy with lump-sum taxes and no international trade, autonomous investment spending increases by $2 million. If the marginal propensity to consume is 0.75, equilibrium gross domestic product will change by a maximum of
A) $0.5 million
B) $1.5 million
C) $2.0 million
D) $8.0 million
E) $15.0 million
Ans: D) $8.0 million
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