Assuming the MPC is 0.8, construct a table similar to the following table in this chapter.
a. Show what would happen in the first five rounds following an increase in investment spending from $400 billion to $800 billion.
b. If investment spending stays at $800 billion, what would be the ultimate effect on real GDP?
c. How much would consumption spending rise as a result of the rise in investment spending?

Additional Spending in Each Round (billions of dollars per year) Total Additional Spending (billions of dollars per year) Round Initial increase in nvestment spending 1,000 1,000 Round 2 600 1,600 Round 3 360 1,960 Round 4 216 2,176 Round 5 130 2,306 Round 6 78 2,384 2,431 Round 7 47 Round 8 28 2,459 Round 9 17 2,476 Round 10 10 2,486 Round 20 0.06 Very close to 2,500