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    A Discussion on the Multiplier Process

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    The economy starts at equilibrium and the MPC = 0.75. What would be the effect of a $300 increase in government spending once all the rounds of the multiplier process are complete?

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    https://brainmass.com/economics/expenditure-multipliers/a-discussion-on-the-multiplier-process-256146

    Solution Preview

    The multiplier is given by

    Multiplier = 1/MPS

    and we ...

    Solution Summary

    This solution presents a very brief formula and explanation in order to calculate the effect of an increase in taxes when all rounds of the multiplier process is complete. All calculations are provided.

    $2.19