Spending Multiplier Calculator
Spending Multiplier Calculator
Component | Description |
---|---|
Marginal Propensity to Consume (MPC) | The proportion of additional income that is spent on consumption. |
Spending Multiplier | The factor by which a change in spending will affect the total economic output. |
Formula | Spending Multiplier = 1 / (1 – MPC) |
Purpose | Used to measure the impact of changes in consumption on the overall economy. |