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March 6, 2015

Homework Help: Macroeconomics

Posted by Lauren on Sunday, November 14, 2010 at 7:59pm.

How would i approach this question? I don't necessarily want an answer. A "how to" would be better.

(Simple Spending Multiplier) For each of the following values for the MPC, determine the size of the simple spending multiplier and the total change in real GDP demanded following a $10 billion decrease in spending:
a. MPC = 0.9
b. MPC = 0.75
c. MPC = 0.6

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