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Economics

Assume that the average American's marginal propensity to consume (MPC)is 1/2, and the American Producers MPC is also 1/2
Caculate the following with an explanation how you arrived at each result:
The Amount Consumers will spend on new consumption.
The amount of new spending from producers.
The Multipler in this case.
The total increase in spending from the primary spending of $400 Million.
Explain the Multipler concept in this case.
What are the qualifications and limitations of the multiplier model?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9278182

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