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If a $100 Billion Decrease in Investment Spending Causes Income

Question 208

Multiple Choice

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.

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