If the Multiplier Is 2 and Investment Spending Falls by $5

question 244

Multiple Choice

If the multiplier is 2 and investment spending falls by $5 billion, then equilibrium income:

• A) increases by $10 billion.
• B) increases by $2.5 billion.
• C) decreases by $5 billion.
• D) decreases by $10 billion.

---

Definitions:

Worrying

The process of thinking about and focusing on negative outcomes or events that might happen in the future, often leading to anxiety.

Dizziness

A sensation of spinning around and losing one’s balance, often associated with faintness or lightheadedness.

Generalized Anxiety Disorder

A mental health condition characterized by persistent and excessive worry about various aspects of life, not limited to specific situations.

Muscle Tension

The condition in which muscles of the body remain semi-contracted for an extended period, often resulting in muscle pain or discomfort.