MindTap - Cengage Learning engage.com/staticb/ui/evo/index.html?deploymentld=5981412353502464190243042516&eISBN=9780357133576&id=1 188289509&sna... CENGAGE |MINDTAP Q s Module Six Quiz Back to Assignment Attempts 1.3 Keep the Highest 1.3/ 3 6. The multiplier effect of a change in government purchases Consider a hypothetical closed economy in which households spend $0.65 of each additional dollar they earn and save the remaining $0.35. The marginal propensity to consume (MPC) for this economy is , and the spending multiplier for this economy is Suppose the government in this economy decides to decrease government purchases by $350 billion. The decrease in government purchases wil lead to a decrease in income, generating an initial change in consumption equal to is decr