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The value of the multiplier can be calculated using the formula ( \text{Multiplier} = \frac{1}{1 - MPC} ), where MPC is the marginal propensity to consume. Alternatively, in the context of government spending, it can also be expressed as ( \text{Multiplier} = \frac{\Delta Y}{\Delta G} ), where ( \Delta Y ) is the change in national income and ( \Delta G ) is the change in government spending. Essentially, the multiplier reflects how much economic output increases in response to an initial increase in spending.

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4w ago

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