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10 cards from this deck
Small spending change creates much larger change in economy output
M=11−mpcM = \frac{1}{1-mpc}M=1−mpc1
M=1mpsM = \frac{1}{mps}M=mps1
Proportion of extra income that people spend
Proportion of extra income that people save
mpc+mps=1mpc + mps = 1mpc+mps=1
M=ΔYΔIM = \frac{\Delta Y}{\Delta I}M=ΔIΔY
Larger mpc creates bigger multiplier
mps, mrt (taxation), mpm (imports)
John Keynes
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