Mpc ???? (1 Viewer)

[beckyboo]

hey everyone... does anyone understand all this multiplier and mpc and crap??? i dont understand i think im dumb Good luck everyone and i luv u all bec

 

[George W. Bush]

everybody does but you
although even if you don't you shouldn't worry too much
short answers on the multiplier are rather rare, generally you'll just have to times by 4 or 5 in multiple choice

 

[santaslayer]

Multiplier is the level an input of money will rise after doing a few rounds within the economy.....

 

[olay]

i get everything except for how the multiplier itself actually works - as in WHY that growth occurs. can someone pls explain that whole process of 'going through the rounds' and why at the end, national income increases????

 

[Zarathustra]

I get $1 spend 90c and save 10c - you get the 90c spend 81c and save 9c - and so on... eventually the $1= 1/(1-a)= 1/0.1 = $10
... got it



As the demand increases so does ecos growth, as if AD>AS there will be growth - because as more is demanded more is produced to meet the demand
and ecos growth is defined as greater goods produced.
If you don't understand this you should drop ecos, seriously