Suppose that out of the original 100 increase in government spending, 60 will be recycled back into purchases of domestically produced goods and services. Following this multiplier effect, what value will be recycled in the next round in the cycle?
A. 42
B. 3.6
C. 16.66
D. 36
Answer:D
Suppose that out of the original 100 increase in government spending, 60 will be recycled back into purchases of domestically produced goods and services. Following this multiplier effect, what value will be recycled in the next round in the cycle?
A. 42 B. 3.6 C. 16.66 D. 36
Explanation: Type: Multiple Choice