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Value of the expenditure multiplier in this closed economy

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Reference no: EM132512198

If a R200 billion increases in investment spending creates R200 billion of new income in the first round of the multiplier process and R160 billion in the second round.

Calculate: a. the marginal propensity to consume (MPC).

b. the value of the expenditure multiplier in this closed economy.

Reference no: EM132512198

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