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lawyer [7]
3 years ago
7

In a certain economy, when income is $100, consumer spending is $60. the value of the multiplier for this economy is 4. it follo

ws that, when income is $101, consumer spending is
Business
1 answer:
horrorfan [7]3 years ago
7 0
The multiplier is the factor by which gains in total output are greater than the change in spending that caused it. It is  used in reference to the relationship between investment and total  income. Let us with C denote the change in consumption and with Y the change in income. If consumption increases by X then the <span>multiplier is</span>:
multiplier=1/1- spend 
4=1/1-spend
1-spend=4 spend=-3
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