If the MPC = 0.6 and government purchases increase by $2 trillion,then equilibrium real GDP demanded

Name: If the MPC = 0.6 and government purchases increase by $2 trillion,then equilibrium real GDP demanded
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The government spending multiplier is calculated as 1/(1-MPC). With an MPC of 0.6, the multiplier is 1/(1-0.6) = 2.5. Therefore, an increase in government purchases by $2 trillion will increase equilibrium real GDP demanded by 2.5 * $2 trillion = $5 trillion.