Suppose lower expectations lead to a decrease of $240 in desired investment in the economy and the marginal propensity to consume is 0.75.Table 10.2Spending CyclesChange in this Cycle's Spending and IncomeCumulative Decrease in Spending and IncomeFirst-cycle spending-$240-$240Second-cycle spending________________Third-cycle spending________________In Table 10.2, what is the cumulative decrease in expenditure by the end of the third cycle?
A. -$420.00.
B. -$555.00.
C. -$960.00.
D. -$240.00.
Answer: B
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