Answer to Question #202599 in Economics for oshomeet

Question #202599

what is the value of changeing c if MPC 0.5 Innestal investment is 1000

Expert's answer

if MPC = 0.5, then the value of multiplier is m = 1/(1 - 0.5) = 2.

So, the investment of 1000 will increase GDP by 1000*2 = 2000 and consumption by 2000 - 1000 = 1000.

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