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If the MPC is 0.85 and the initial investment is \$5 billion, what is the resulting increase in GDP?
Which of the following best describes the significance of the multiplier effect in macroeconomics?
Why is understanding the multiplier effect important for policymakers?
How does the relationship between MPC and MPS affect the calculation of the multiplier?
Given an initial investment of \$2 billion and an MPC of 0.8, calculate the first three rounds of increased spending.
How does an increase in investment spending lead to a chain reaction of increased consumer spending?
What is the initial effect of increased investment spending on household income?
What is the multiplier effect in the context of investment spending?
How does a lower MPC affect the size of the multiplier and the total increase in GDP?
What are the implications of ignoring taxes in the calculation of the multiplier effect?