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MPC/MPS/Spending Multiplier 1. Dora earns $50,000 a year at her jobs. When she was given a raise of $5,000, her spending increased from $50,000 to

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MPC/MPS/Spending Multiplier 1. Dora earns $50,000 a year at her jobs. When she was given a raise of $5,000, her spending increased from $50,000 to $54,000. Calculate Dora's MPC and MPS. 2. If MPC is 0.5 and the government increases spending by $3 billion, what is the change in real GDP? 3. Create a table showing the expenditure multiplier for each of the MPCs listed. MPC Multiplier 0.5 0.75 0.8 0.9 4. Complete the graph for consumption, savings, MPC, & MPS Y. Consumption (c) Savings (s) MPC MPS 0 5 10 13 25 37 50

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