>> Business Economics
If in an economy a $120 billion increase in consumption spending creates $120 billion of new income in the first round of the multiplier process and $90 billion in the second round, the multiplier and the marginal propensity to consume will be respectively: a. 5.00 and 0.80; b. 4.00 and 0.75; c. 3.33 and 0.70; d. 2.50 and 0.40. Please show me how this is figured out too.