If a $200 Billion Increase in Investment Spending Creates $200

question 216

Multiple Choice

If a $200 billion increase in investment spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the multiplier in the economy is

• A)4.
• B)5.
• C)3.33.
• D)2.5.

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Definitions:

Limited Partnership

is a form of partnership characterized by having one or more general partners with unlimited liability, and one or more limited partners whose liability is limited to the amount of their investment.

Management Participation

The involvement or engagement of managerial staff in the planning and decision-making processes of a business or organization.

Liability

The state of being legally responsible for something, particularly in terms of debts or legal obligations.

Fiduciary Duty

An obligation one party (fiduciary) has to act in the best interest of another (the principal) in situations that require trust, honesty, and loyalty.