Math, asked by janhavi3409, 1 year ago

Government expenditure multiplier formula

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Answered by Anonymous

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The formula for the simple spending multiplier is 1 divided by the MPS. Let's try an example or two. Assume that the marginal propensity to consume is 0.8, which means that 80% of additional income in the economy will be spent. ... So, 1 minus the MPC is going to be 1 - 0.8, which is 0.2.

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