Homework Answers
Answer - Multiplier = 1/(1-0.58)
= 1/0.42
= 2.38
Multiplier = Change in GDP / Change in investment (here government exp)
2.38 = 457 / change in govn. Exp.
Change in exp. = 457/2.38
= $192.01
Thus the government need to increase its expenditure by $ 192.01
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