Answer to Question #110185 in Macroeconomics for Kgothatso

Question

Suppose that the real GDP increase by R5,000 billion when government
expenditure on the construction of new roads increase by R1,500 billion. What is
the value of the marginal propensity to consume?

Answer 1

$1500\over500$ $=3 =multiplier$

$Multiplier=$ $1\over mps$

$3=$ $1\over mps$

$mps=$ $1\over3$

$mpc =1-$ $1\over3$

$mpc =$ $2\over3$