Page 92 - Macroeconomics. book docx_Neat
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MPC Multiplier
0.5 2
0.6 2.5
0.8 5
0.9 10
Higher MPC → Larger multiplier
Higher saving → Smaller multiplier
10- Investment Multiplier in Real Life
Examples:
Building a factory
Constructing a road
Opening a university
Government investment projects
All these increase:
Employment
Income
Consumption
Economic growth
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