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Assume citizens in China have a much lower marginal propensity to consume than citizens of the United States. Assume there is a positive shock to investment of equal size in both China and the United States.

According to the Keynesian model, which country will have a stronger output response?

A

United States

B

China

C

Different marginal propensities to consume will not effect the strength of the output response.

D

There is not enough information to answer this question

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