If the MPC = 0.75, the government spending multiplier would be

Question

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The government spending multiplier formula is 1/(1-MPC). If the MPC is 0.75, then the formula becomes 1/(1-0.75) which equals 4. Therefore, the government spending multiplier would be 4. Option A is incorrect because it represents the spending multiplier for the Marginal Propensity to Save (MPS), which is 1-MPC. Options B and D are both incorrect and do not align with the formula for the government spending multiplier.