Explore BrainMass
Share

Explore BrainMass

    Multiplier

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Given an increase in spending of $1,000, and a Marginal Propensity to Consume (MPC) of 80% (8/10), what would be the total increase in the GDP (as a result of the Multiplier?) What would the Multiplier be? Please show all work to help me clearly understand this problem.

    © BrainMass Inc. brainmass.com October 9, 2019, 8:53 pm ad1c9bdddf
    https://brainmass.com/economics/macroeconomics/finding-multiplier-165693

    Solution Summary

    Find the multiplier in this case.

    $2.19