If an Increase of $10 Billion of Investment Results in an Increase

Multiple Choice

If an increase of $10 billion of investment results in an increase in equilibrium expenditure of $40 billion, the expenditure multiplier equals

A) $10 billion × $40 billion = $400 billion.
B) $40 billion - $10 billion = $30 billion.
C) $40 billion ÷ $10 billion = 4.
D) $10 billion ÷ $40 billion = 0.25.
E) $10 billion - $40 billion = -$30 billion.