(Interest Rate, Planned investment in billions): (3%,$400) (6%,$360), (9%, $320), (12%, $280), (15%, $240), (18%, $200): Suppose the expenditure multiplier is 5 and the initial interest rate is 12%. A move to what interest rate will increase equilibrium output by 400 billion?
A) 3%
B) 6%
C) 9%
D) 18%
Answer: D) 18%
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What will be an ideal response?
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