Calculating the Spending Multiplier- Macroeconomics

Mr. Clifford introduces the concept of the spending multiplier, explaining how money spent in the economy multiplies as it is re-spent by others. He provides examples with different Marginal Propensity to Consume (MPC) values, showing how to calculate the multiplier. As MPC decreases, the multiplier effect diminishes, illustrating the relationship between spending and saving. The video concludes with insights on how changes in spending behavior impact the economy.

What is the spending multiplier when the Marginal Propensity to Consume is 0.9?

Evaluate responses using AI:

OFF

Calculate the spending multiplier when the Marginal Propensity to Consume is 0.8.

Evaluate responses using AI:

OFF

Explain the relationship between the Marginal Propensity to Consume and the spending multiplier.

Evaluate responses using AI:

OFF

What happens to the spending multiplier as the Marginal Propensity to Consume decreases?

Evaluate responses using AI:

OFF

What is the spending multiplier when the Marginal Propensity to Consume is 0?

Evaluate responses using AI:

OFF