how-does-an-increase-in-investment-spending-lead-to-a-chain-reaction-of-increase

Question

How does an increase in investment spending lead to a chain reaction of increased consumer spending?

Accepted Answer

Increased investment spending raises household incomes, leading to higher consumer spending.

Answer

Increased investment spending has no effect on consumer spending.

Answer

Increased investment spending directly increases government spending, not consumer spending.

Answer

Increased investment spending decreases household incomes, leading to lower consumer spending.