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Income-expenditure multiplier = 1/(1 – MPC)The XXXX complex "how-to" XXXXXXXX a XXX XX XXXXX... specifically, the XXXXXXXXX mathematical relation:Y = XX + c1 (X – X) + I + GXXXXX X represents output, XX represents exogenous (XXXXXXXXXX) XXXXXXXXXXX, XX XXXXXXXXXX XXX XXXXXXXX XXXXXXXXXX XX consume, X represents taxation, I represents XXXXXXXXXX, X represents XXXXXXXXXX purchases. Assume a closed economy, so there XXX XX XXXXXXX or XXXXXXX.Proceed XX rearranging XXX above XXXXXXXX:Y = XX + XX (X – X) + I + XX = XX + XXX – c1T + I + XY – c1Y = XX – XXX + I + X(1 – XX) Y = c0 – c1T + I + GX = 1/(X – c1) [c0 &XXXXX; c1T + I +X]Notice XXXXX XXXXXXX the XXXXXXX: XXX XXX same expression as the XXXXXX-XXXXXXXXXXX multiplier I gave near XXX start XX this answer. If you increase c0, I or G by XXX unit, you will see a X/(X – c1) XXXX XXXXXXXX in output. This XX a convenient mathematical XXXXXXXXXXXX XX the XXXXXXXXX behind XXX XXXXXXXXXX (namely, XXXX XXXXXXX increases in XXXXXX XXXX XXXX XX XXXXXXX induced XXXXXXX in output).
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