If a $200 billion increase in investment spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the multiplier in the economy is:
A)4.
B. 5.
C. 3. 33.
D. 2. 5.
Answer:B
If a $200 billion increase in investment spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the multiplier in the economy is:
A)4. B. 5. C. 3. 33. D. 2. 5.