Because MPC is 0.75, the multiplier equals 1/(1-MPC) = 1/0.2

Because MPC is 0.75, the multiplier equals 1/(1-MPC) = 1/0.25 =4 . Net of indirect effects on planne… Show more Because MPC is 0.75, the multiplier equals 1/(1-MPC) = 1/0.25 =4 . Net of indirect effects on planned investment spending, therefore, total autonomous expenditures must decline by $ 10 billion in order to shift the aggregate demand curve rightward by $ 40 billion. The governmnet should reduce its spending by What? billion in order to shift the aggregate demand curve rightward by $ 40 billion. • Show less

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