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The formula for the multiplier is 1/(1 - MPC). Explain what MPC is, and why a larger MPC is linked with a larger multiplier effect.
The formula for the multiplier is 1/(1 - MPC). Explain what MPC is, and why a larger MPC is linked with a larger multiplier effect. For full credit, your answer should discuss how expenditure is also income at the macroeconomic leve
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Macroeconomics A European Perspective
Authors: Olivier Blanchard, Alessia Amighini, Francesco Giavazzi
4th Edition
1292360895, 9781292360898
