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Day: June 25, 2025
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You should test the equation to prove to yourself that the higher the MPC of a country, the greater the multiplier effect for changes in GDP! The equation can also be rewritten as: Change in 𝐺 𝑃=Change in 𝐴 ×(1 1−𝑀𝑃𝐶) The factor 1/(1 − MPC) is called the multiplier. If a question tells you that the multiplier