What Is the Formula for the Simple Spending Multiplier

question 2

Multiple Choice

What is the formula for the simple spending multiplier?

• A) 1/(1+MPC)
• B) 1/(1-MPC)
• C) 1/(MPC-1)
• D) 1/MPC
• E) (1-MPC)/(1+MPC)

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Definitions:

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