If intended investment increases by $50, and the MPC remains unchanged at 0.75, then
a. the economy is in equilibrium at both levels of intended investment because MPC remains unchanged
b. national income remains unchanged regardless of the change in intended investment
c. MPS must increase from 0.25 to 0.75
d. national income increases by $200
e. we know this couldn't happen because the MPC cannot remain unchanged when intended investment changes
D
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A hypothesis that assumes that people combine the effects of past policy changes on economic events and their own judgment about future effects of current and future policy changes is known as
A) active expectations. B) modern expectations. C) rational expectations. D) adaptive expectations.
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What will be an ideal response?