Refer to the information provided in Figure 9.3 below to answer the questions that follow. Figure 9.3
-Refer to Figure 9.3. The expenditure multiplier is

Question

Refer to the information provided in Figure 9.3 below to answer the questions that follow.  Figure 9.3
-Refer to Figure 9.3. The expenditure multiplier is

Quizplus · Accepted Answer

The expenditure multiplier in Figure 9.3 is 2.5, as shown by the formula: 1/(1-MPC) = 1/(1-0.4) = 1/0.6 = 2.5. This means that for every increase in expenditure by $1, there will be a total increase in GDP of $2.50.

Refer to the Information Provided in Figure 9