Question: If the MPC were 0.8, (a) How much spending would occur in the third cycle of Figure 12.6? (b) How many spending cycles would occur

If the MPC were 0.8,

(a) How much spending would occur in the third cycle of Figure 12.6?

(b) How many spending cycles would occur before consumer spending increased by $200 billion?

Figure 12.6

6: Sales increase by $75 t Product markets su Bupueds Jouns START 1: Government spends HERE S100 billon BUsiness firms Government Households Factor markets 2. Sales increase by $100 bilion by $75 bilion. 4: More income. 3: Increased jobs and wages

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a 64 Billion b 5th round Explanation Keep in mind that each cycle is originated by a change in spending in the product market Cycle 1 Government spend... View full answer

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