During a recession, the government increases spending by \$300 billion with an MPC of 0.9. Evaluate the potential impact on GDP.

How does an increase in government spending influence consumption patterns through the multiplier effect?

How does the multiplier effect influence consumption patterns when there is an increase in government spending?

If the MPC is 0.8, what is the multiplier, and how would a \$100 billion increase in government spending affect GDP?

What is the significance of the multiplier effect in economic policy?

With an MPC of 0.7, what is the multiplier, and how would a \$50 billion increase in net exports affect GDP?

Why is the multiplier effect significant in economic policy decisions?

In a recession, the government increases spending by \$400 billion with an MPC of 0.85. Evaluate the potential impact on GDP.

Which of the following best describes the multiplier effect?

What does the intersection of the aggregate expenditures line and the 45-degree line indicate in the AE model?