Refer to the Given Table, Which Illustrates the Multiplier Process

question 169

Multiple Choice

$$\begin{array} { | l | c | c | c | } \hline & \text { Change in Income } & \begin{array} { c } \text { Change in } \\\text { Consumption }\end{array} & \text { Change in Saving } \\\hline \text { Assumed Increase in Investment } & \$ 20 & \$ & \$ 4.00 \\\hline \text { Second Round } & \$ & \$ 12.80 & \$ \\\hline \text { All Other Rounds } & \$ & \$ 51.20 & \$ \\\hline \text { Totals } & \$&\$ & \$ 20.00 \\\hline\end{array}$$ Refer to the given table, which illustrates the multiplier process. The total change in income resulting from the initial change in investment will be

• A) $100.
• B) $20.
• C) $80.
• D) $200.

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Definitions:

Mutually Agreeable Transactions

Exchanges between parties that both sides consent to because they are beneficial.

Equal Distribution

The concept of ensuring that resources, wealth, or opportunities are evenly distributed among all members of society.

Resource Allocation

The process of distributing available resources among various competing needs and wants.

Laissez-Faire

An economic philosophy of free-market capitalism that opposes government intervention.