Which statement about the multiplier is correct?
A. If a $20 billion increase in spending creates $20 billion of new income in the first round of
the multiplier process and $15 billion in the second round, the multiplier in the economy is
5
B. If a $40 billion increase in spending creates $40 billion of new income in the first round of
the multiplier process and $20 billion in the second round, the multiplier in the economy is
4
C. If a $60 billion increase in spending creates $60 billion of new income in the first round of
the multiplier process and $50 billion in the second round, the multiplier in the economy is
5
D. If an $80 billion increase in spending creates $80 billion of new income in the first round of
the multiplier process and $60 billion in the second round, the multiplier in the economy is
4
D. If an $80 billion increase in spending creates $80 billion of new income in the first round of the multiplier process and $60 billion in the second round, the multiplier in the economy is 4