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Question Title:
Simple Spending Multiplier
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The simple "how-to" is as follows:</span><br style="font-family: Helvetica Neue, Helvetica, Arial, sans-serif; font-size: 13px; line-height: 16px;" /><br style="font-family: Helvetica Neue, Helvetica, Arial, sans-serif; font-size: 13px; line-height: 16px;" /><span style="font-family: Helvetica Neue, Helvetica, Arial, sans-serif; font-size: 13px; line-height: 16px;">Income-expenditure multiplier = 1/(1 – MPC)</span><br style="font-family: Helvetica Neue, Helvetica, Arial, sans-serif; font-size: 13px; line-height: 16px;" /><XX style="font-XXXXXX: Helvetica XXXX, XXXXXXXXX, Arial, XXXX-serif; font-size: 13px; XXXX-XXXXXX: 16px;" /><span style="XXXX-XXXXXX: XXXXXXXXX Neue, XXXXXXXXX, XXXXX, XXXX-serif; XXXX-XXXX: XXXX; line-height: XXXX;">The XXXX XXXXXXX "how-XX" involves a XXX XX maths... specifically, the XXXXXXXXX mathematical relation:</span><XX style="font-family: XXXXXXXXX Neue, Helvetica, XXXXX, XXXX-serif; XXXX-size: 13px; line-XXXXXX: XXXX;" /><br style="font-XXXXXX: Helvetica XXXX, XXXXXXXXX, Arial, sans-serif; font-XXXX: 13px; XXXX-XXXXXX: 16px;" /><span style="XXXX-XXXXXX: XXXXXXXXX XXXX, XXXXXXXXX, XXXXX, XXXX-XXXXX; font-XXXX: 13px; XXXX-XXXXXX: 16px;">Y = XX + c1 (X – T) + I + G</span><XX style="XXXX-XXXXXX: XXXXXXXXX Neue, XXXXXXXXX, XXXXX, sans-serif; font-XXXX: 13px; XXXX-XXXXXX: XXXX;" /><XX style="font-family: Helvetica XXXX, Helvetica, Arial, XXXX-serif; font-size: 13px; line-height: 16px;" /><span style="XXXX-family: Helvetica Neue, Helvetica, Arial, XXXX-serif; font-XXXX: 13px; line-height: XXXX;">Where Y XXXXXXXXXX output, c0 represents exogenous (autonomous) XXXXXXXXXXX, c1 XXXXXXXXXX XXX marginal propensity XX consume, T represents taxation, I represents XXXXXXXXXX, X represents government purchases. XXXXXX a closed economy, so there are XX XXXXXXX or imports.</span><br style="font-XXXXXX: XXXXXXXXX Neue, Helvetica, XXXXX, XXXX-serif; XXXX-size: XXXX; line-XXXXXX: 16px;" /><XX style="XXXX-family: Helvetica Neue, XXXXXXXXX, Arial, XXXX-serif; XXXX-size: XXXX; line-height: 16px;" /><span style="font-XXXXXX: Helvetica Neue, Helvetica, Arial, XXXX-XXXXX; font-size: XXXX; XXXX-XXXXXX: XXXX;">XXXXXXX by XXXXXXXXXXX the above XXXXXXXX:</span><XX style="XXXX-family: Helvetica Neue, XXXXXXXXX, Arial, XXXX-serif; font-XXXX: XXXX; line-height: XXXX;" /><XX style="font-XXXXXX: Helvetica XXXX, XXXXXXXXX, XXXXX, XXXX-serif; font-XXXX: 13px; XXXX-XXXXXX: XXXX;" /><span style="font-XXXXXX: Helvetica Neue, Helvetica, Arial, sans-XXXXX; XXXX-size: 13px; line-height: 16px;">X = c0 + XX (X &XXXXX; X) + I + X</span><br style="XXXX-family: XXXXXXXXX Neue, XXXXXXXXX, Arial, sans-serif; XXXX-XXXX: 13px; line-XXXXXX: XXXX;" /><span style="XXXX-family: XXXXXXXXX Neue, Helvetica, XXXXX, XXXX-XXXXX; font-XXXX: 13px; XXXX-height: XXXX;">X = c0 + c1Y &XXXXX; XXX + I + X</span><br style="XXXX-XXXXXX: XXXXXXXXX XXXX, XXXXXXXXX, Arial, sans-XXXXX; XXXX-size: XXXX; XXXX-XXXXXX: XXXX;" /><span style="XXXX-XXXXXX: XXXXXXXXX XXXX, XXXXXXXXX, XXXXX, sans-serif; XXXX-XXXX: XXXX; line-height: XXXX;">Y &XXXXX; XXX = c0 – XXX + I + G</span><br style="font-family: Helvetica XXXX, XXXXXXXXX, XXXXX, sans-XXXXX; font-size: XXXX; line-height: 16px;" /><span style="XXXX-family: Helvetica XXXX, Helvetica, Arial, XXXX-serif; XXXX-size: XXXX; line-XXXXXX: XXXX;">(X &XXXXX; XX) Y = c0 – c1T + I + G</span><XX style="XXXX-XXXXXX: XXXXXXXXX XXXX, Helvetica, Arial, XXXX-XXXXX; XXXX-size: XXXX; line-XXXXXX: XXXX;" /><span style="XXXX-family: XXXXXXXXX XXXX, Helvetica, XXXXX, sans-serif; XXXX-XXXX: XXXX; line-XXXXXX: 16px;">X = X/(X – XX) [XX – XXX + I +G]</span><br style="XXXX-XXXXXX: Helvetica Neue, Helvetica, Arial, sans-XXXXX; XXXX-XXXX: 13px; line-height: XXXX;" /><XX style="XXXX-family: Helvetica Neue, Helvetica, XXXXX, sans-serif; XXXX-size: 13px; XXXX-height: XXXX;" /><span style="XXXX-family: XXXXXXXXX Neue, XXXXXXXXX, XXXXX, sans-serif; XXXX-size: XXXX; line-height: 16px;">Notice XXXXX outside the XXXXXXX: XXX the XXXX XXXXXXXXXX as the XXXXXX-expenditure multiplier I XXXX XXXX the XXXXX XX XXXX answer. If you XXXXXXXX XX, I or X by XXX XXXX, you will see a X/(X &XXXXX; XX) XXXX increase in output. XXXX XX a XXXXXXXXXX XXXXXXXXXXXX distillation XX XXX XXXXXXXXX XXXXXX XXX XXXXXXXXXX (XXXXXX, that initial XXXXXXXXX in XXXXXX XXXX XXXX XX further induced changes in output).</span></p> <p></p>">
