If the marginal propensity to save is 0.35. What is the size of the expenditure multiplier?Provide answer to one decimal point.

Question

If the marginal propensity to save is 0.35. What is the size of the expenditure multiplier?Provide answer to one decimal point.
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Solution 1

The expenditure multiplier can be calculated using the formula:

Multiplier = 1 / (1 - Marginal Propensity to Consume)

However, in this case, we are given the Marginal Propensity to Save (MPS), not the Marginal Propensity to Consume (MPC). But we know that:

MPC + MPS = 1

So, we can calculate the Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
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