If the mpc in the economy is equal to 4/5, then the expenditure multiplier is equal...

If the mpc in the economy is equal to 4/5, then the expenditure multiplier is equal to

Expert Solution

MPC = 4/5 = 0.8 ,

MPC = 0.8

Then the ependiture Multiplier (K) =

=

= 5

ANSWER, Thus, If the mpc in the economy is equal to 4/5, then the expenditure multiplier is equal to 5

MPC = 0.8 ; (K) = 5

Rahul Sunny answered 2 years ago

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