Economists think that the marginal propensity to consume for the Australian economy is between 0.9 and 0.95. Based on our simple multiplier formula, this would imply that the multiplier for Australia should be at least 10. However, many economists agree that the spending multiplier is closer to 2.0. What might explain this supposed anomaly?
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The Answer of Economists think that the marginal propensity to consume for the Australian economy is between 0.9 and 0.95. Based on our simple multiplier formula, this would imply that the multiplier for Australia should be at least 10. However, many economists agree that the spending multiplier is closer to 2.0. What might explain this supposed anomaly?
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Economists Think That the Marginal Propensity to Consume for the Australian