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Business, 20.04.2020 20:45 catsareokiguess

Suppose that an initial $40 billion increase in investment spending expands GDP by $40 billion in the first round of the multiplier process. Also assume that GDP and consumption both rise by $32 billion in the second round of the process.
A. What is the MPC in this economy?
B. What is the size of the multiplier?
C. If, instead, GDP and consumption both rose by $32 billion in the second round, what would have been the size of the multiplier?

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