If a $50 Billion Decrease in Investment Spending Causes Income

question 184

Multiple Choice

If a $50 billion decrease in investment spending causes income to decline by $50 billion in the first round of the multiplier process and by $25 in the second round, the multiplier in the economy is

• A) 2.
• B) 3.33.
• C) 5.
• D) 10.

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Definitions:

Bargain Collectively

The process by which workers, through their unions, negotiate with their employers to establish the terms of employment, including wages, benefits, and working conditions.

U.S. Businesses

Companies operating within the United States, subject to U.S. business laws, regulations, and economic policies.

Union Position

The stance or perspective maintained by a labor union on various issues, including wages, working conditions, and policies affecting its members.

Income Inequality

The unequal distribution of income within a population, leading to disparities in wealth and living standards among different socioeconomic groups.