-Suppose Lower Interest Rates Suddenly Lead to an Injection of $325

question 106

Multiple Choice

-Suppose lower interest rates suddenly lead to an injection of $325 additional investment spending into the economy and the marginal propensity to consume is 0.80.Complete Table 10.1 by calculating the spending cycles as the increased investment spending works its way through the economy. In Table 10.1,what is the change in the third cycle of spending resulting from the higher initial investment?

• A)$50.
• B)$208.
• C)$325.
• D)$585.

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