Simple spending multiplier

Related BrainMass Solutions

• slope of the consumption function

  17160 (Simple Spending Multiplier) Suppose that the MPC is 0.8, while the sum of planned investment, government purchases, and net exports is $500 billion. Suppose also that government budget is in balance.

• government spending multiplier

  The government spending multiplier is 1/MPS and the tax multiplier is -MPC/MPS = -(1-MPS)/MPS.). Its absolute value is always one less than the simple multiplier and it is always negative.

• the level of real GDP demanded

  17161 The Level of Real GDP Demanded Assume the simple spending multiplier equals 10.

• Navigating Microeconomics Concepts

  for MPC, determine the size of the simple spending multiplier and the total change in real GDP demanded following a 10 billion dollar decrease in spending: a.. =.09 b. =.075 c. =00.6 3) (Changes in aggregate supply)

• Revival of the Economy with Tax Cuts

  In short the simple tax multiplier gives the ratio of the change in aggregate production to an autonomous change n government taxes when consumption is the only induced expenditure (Holmes. J & Smyth.

• government purchases multiplier vs net tax multiplier

  (Fiscal multipliers) The simple expenditures multiplier, such as that which would be used for government purchases, is the inverse of the MPS. The tax multiplier is rather - MPC/MPS.

• Olympic games in London in 2012

  Since the government-spending multiplier is spending multiplier = 1 / (1-MPC), and the tax multiplier is tax multiplier = - MPC / (1-MPC).

• Full employment after a recession

  The simple expenditures multiplier, such as that which would be used for government purchases, is the inverse of the marginal propensity to save (MPS). The tax multiplier is rather - MPC/MPS.

• Complications resulting from expansionary fiscal policy

  The simple expenditures multiplier, such as that which would be used for government purchases, is the inverse of the marginal propensity to save (MPS). The tax multiplier is rather - MPC/MPS.