Should you splurge on a restaurant meal or save money by eating at home? Should you buy a new car and, if so, how expensive a model? Should you redo that bathroom or live with it for another year? In the real world, households are constantly confronted with such choices—not just about the consumption mix but also about how much to spend in total. These choices, in turn, have a powerful effect on the economy: consumer spending normally accounts for two-thirds of total spending on final goods and services. In particular, as we’ve just seen, the decision about how much of an additional dollar in income to spend—the marginal propensity to consume—determines the size of the multiplier, which determines the ultimate effect on the economy of autonomous changes in spending.