Spending Multiplier
Calculate economic spending multiplier effect. Formula: Multiplier = 1 / (1 - MPC) where MPC = Marginal Propensity to Consume.
Formula
Multiplier = 1 / (1 - MPC)
MPC = 0.75
Inputs
- Marginal Propensity to Consume (0.0-0.99): 0.75
Multiplier = 4x
Frequently asked questions
Why this matters?
Shows how initial spending ripples through economy. Higher MPC = higher multiplier effect.