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?© BrainMass Inc. brainmass.com October 9, 2019, 11:25 pm ad1c9bdddf
The multiplier is given by
Multiplier = 1/MPS
and we ...
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.