Let's say there's an economy where people have an MPC of 0.90. The government increases its spending by $100 million to stimulate the economy. When the government spends $100 million, output and income rise by that same amount. I've put this in the table you can see to your right. Econ Tutor Like you pointed out, not all households will be personally affected right away. The government only provided stimulus to some. But this is just the first step of a multi--step process. Those that receive the stimulus will take that $100 million and spend some part of it. Remember, we said the MPC was 0.90. That means that these recipients will spend