If a $100 billion decrease in investment spending causes income to decline by $100 billion in the first round of the multiplier process and by $75 billion in the second round, income will eventually decline by:
A)$200 billion.
B. $300 billion.
C. $400 billion.
D. $500 billion.
Answer:C
If a $100 billion decrease in investment spending causes income to decline by $100 billion in the first round of the multiplier process and by $75 billion in the second round, income will eventually decline by:
A)$200 billion. B. $300 billion. C. $400 billion. D. $500 billion.