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If a $200 Billion Increase in Investment Spending Creates $200

Question 216

Multiple Choice

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.

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