Why this relationship exists? What would be a hypothetical numerical example of the marginal propensity to consume and the multiplier?

1 Answer

  • Oiy
    Lv 4
    5 months ago

    The relationship in the real world is described thoroughly in 101. The income is paid for goods and services in the first round. It will create investment and jobs to produce such goods and services, and income for the guys who work for it in the second round. The rounds will go on and on. But it will stop at a point called equilibrium. It's not my wish though.

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