What is the formula for the spending multiplier?
Suppose MPC = 0.8. What is the value of the spending multiplier?
Suppose the government decides to increase spending by $1000. If the multiplier = 5, by how much does equilibrium GDP increase? $
Suppose MPC = 0.667. What is the value of the spending multiplier? Round the answer to two or fewer decimal places.
Suppose the government decides to decrease spending by $2,000. If the multiplier = 3, by how much does equilibrium GDP decrease? $