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When the Total Income of an Economy Is $1,000, the Consumption

Question 2

Multiple Choice

When the total income of an economy is $1,000, the consumption spending is $900. If the total income increases to $1,500, then consumption spending increases to $1,300. Assuming that the only leakage in the economy is saving, the spending multiplier for the economy is:


A) 3.
B) 4.
C) 5.
D) 6.

Correct Answer:

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