Determine sizes of the MPC- the MPS and the multiplier
Refer to the table below in answering the questions which follow: Suppose that investment, net exports and government expenditures do not modify with changes in real GDP, determine the sizes of the MPC, the MPS, and the multiplier?
Refer to the table below in answering the questions which follow:
Suppose that investment, net exports and government expenditures do not modify with changes in real GDP, determine the sizes of the MPC, the MPS, and the multiplier?
Expert
MPC = .8 (= $40 billion/$50 billion); MPS = .2 (= 1 -.8); multiplier = 5 (= 1/.2).
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