Consider two separate economies, Economy A and Economy B. In Economy A, for every additional dollar of income received, households typically spend $0.90. In Economy B, for every additional dollar of income received, households typically spend $0.60. If both economies experience an identical, one-time increase in business investment, which statement accurately compares the resulting total change in national income?

Evaluating Fiscal Stimulus Effectiveness

Calculating Required Spending for a Target Income Increase

The Economic Amplification Process

An initial change in spending can lead to a larger total change in national income. The size of this amplification effect depends on the proportion of additional income that households choose to spend. Match each proportion of additional income spent with the correct total amplification effect on income.