If a $100 Billion Decrease in Investment Spending Causes Income

question 163

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)$400 billion.
• B)$300 billion.
• C)$200 billion.
• D)$500 billion.

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Definitions:

Financial Plan

A comprehensive evaluation of an individual's current and future financial state by using current known variables to predict future income, asset values, and withdrawal plans.

Financial Plans

Strategic documents that outline an individual's or organization's current financial situation, goals, and strategies to achieve those goals.

Financial Planning

The process of creating strategies for managing finance, including budgeting, saving, investing, and planning for future financial needs.

Forecast Growth

The predicted increase in value or size of a company, economy, or particular financial metric over a specified future period.