If government spending increases by $10 billion and the marginal propensity to consume is .75, then national income

Name: If government spending increases by $10 billion and the marginal propensity to consume is .75, then national income
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The spending multiplier is calculated as 1/(1-MPC), which in this case is 1/(1-0.75) = 4. Therefore, an increase in government spending by $10 billion will increase national income by $10 billion * 4 = $40 billion.

If Government Spending Increases by $10 Billion and the Marginal