GDP C S Ig $100 $100 $0 $80

Multiple Choice

GDP C S Ig $100 $100 $0 $80
200 160 40 80
300 220 80 80
400 280 120 80
500 340 160 80
600 400 200 80
700 460 240 80
Refer to the accompanying information for a closed economy.The introduction of $80 billion of government spending would

A) lower the multiplier from 2.5 to 2.0.
B) increase the multiplier from 2.5 to 3.0.
C) increase the multiplier from 2.0 to 2.5.
D) have no effect on the size of the multiplier.