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    9. (Simple Spending Multiplier) For each of the following values for the MPC, determine the size of the simple spending multiplier and the total change in real GDP
    demanded following a $10 billion decrease in autonomous spending:
    a. MPC = 0.9
    b. MPC = 0.75
    c. MPC = 0.6

    © BrainMass Inc. brainmass.com March 6, 2023, 1:51 pm ad1c9bdddf


    Solution Preview

    Simple Spending Multiplier = 1/(1-MPC)
    MPC Spending ...

    Solution Summary

    Simple spending multiplier is applied.