when an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of

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24-11-2022
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when an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of

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NomulaHarsh NomulaHarsh · Answer 1 · 2022-12-01T13:03:38+01:00

The crowding-out effect has been demonstrated when an increase in government spending raises certain people's income and those people then spend a portion of that money on more consumer items. The Marginal Propensity to Consume or MPC is highlighted by this.

Describe MPC.

The percentage of an overall pay increase that a consumer spends on purchasing goods and services rather than saving is known as the marginal propensity to consume (MPC) in economics.

Keynesian macroeconomic theory includes a concept known as marginal propensity to consume, which is calculated as the change in consumption divided by the change in income. A consumption line represents MPC.

To know more about the MPC, refer to the link below:

https://brainly.com/question/29308339

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