Given MPC is the marginal propensity to consume, the formula for the spending multiplier is

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The spending multiplier is 1 / (1 - MPC). This is because the spending multiplier measures the total increase in spending that results from an initial increase in spending. The marginal propensity to consume (MPC) is the fraction of each additional dollar of income that is spent on consumption. So, if the MPC is 0.8, then for every additional dollar of income, 80 cents will be spent on consumption. The remaining 20 cents will be saved. The spending multiplier is 1 / (1 - MPC) because it takes into account the fact that the initial increase in spending will lead to a series of subsequent increases in spending, each of which is smaller than the previous one.

Given MPC Is the Marginal Propensity to Consume, the Formula