what do you conclude? Scenario 1: MPC = 0.35 and MPS = 0.65 1. Tax Multiplier = MPC/MPS 0.35 / 0.65 = 0.53 2. Aggregate Demand = Gov't. Taxes x Tax Multiplier $1,500,000 x 0.53 = $795,000 Scenario 2: MPC = 0.5 and MPS = 0.5 1. Tax Multiplier = MPC/MPS 0.5 / 0.5 = 1 2. Aggregate Demand = Gov't. Taxes x Tax Multiplier $1,500,000 x 1 = $1,500,000 Scenario 3: MPC = 0.85 and MPS = 0.15 1. Tax Multiplier = MPC/MPS 0.85 / 0.15 = 5.66 2. Aggregate Demand = Gov't. Taxes x Tax Multiplier $1,500,000 x 5.66 = $8,490,000