Say that C = XXXXXXXXXX8Y, I = 4, G =1. What is the value of the multiplier?

Question

Say that C = XXXXXXXXXX8Y, I = 4, G =1. What is the value of the multiplier?

David · Accepted Answer

Value of Multiplier   =   5
C = 15+0.8Y, I = 4, G = 1
Value of multiplier k = 1/1-MPC
in this question MPC = 0.8
There for k = 1/0.2 = 5
                  Y              = C+I+G
                  Y              = 15 + 0.8Y+4+1
                  Y-0.8Y     = 20
                  0.

Say that C = XXXXXXXXXX8Y, I = 4, G =1. What is the value of the multiplier?

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