What is the size of the multiplier

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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 $24 billion in the second round of the process. Instructions: Round your answers to 1 decimal place. 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?

Reference no: EM131099447

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