Suppose consumer confidence improves and as a result,consumer spending increases by $50 billion dollars.Assume households spend $0.80 of each extra dollar of income and save the remaining $0.20.Other things equal,calculate by how much spending will increase during:
a. the first round through the circular flow.
b. the second round through the circular flow.
c. the third round through the circular flow.
d. the fourth round through the circular flow.

Question

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The Answer of Suppose consumer confidence improves and as a result,consumer spending increases by $50 billion dollars.Assume households spend $0.80 of each extra dollar of income and save the remaining $0.20.Other things equal,calculate by how much spending will increase during:
a. the first round through the circular flow.
b. the second round through the circular flow.
c. the third round through the circular flow.
d. the fourth round through the circular flow.

Suppose Consumer Confidence Improves and as a Result,consumer Spending Increases