Assume a closed economy,that taxes are fixed,and the marginal propensity to consume is equal to 0.8.What is the government spending multiplier?

Name: Assume a closed economy,that taxes are fixed,and the marginal propensity to consume is equal to 0.8.What is the government spending multiplier?
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Quizplus · Accepted Answer

The government spending multiplier in a closed economy with fixed taxes and a marginal propensity to consume (MPC) of 0.8 is calculated as 1/(1-MPC) = 1/(1-0.8) = 1/0.2 = 5.

Assume a Closed Economy,that Taxes Are Fixed,and the Marginal Propensity