Jim Whitney

Economics 102

 The multiplier effect of spending changes: record sheet  

CASE 1: Consumption spending (C) rises by 80 percent of any increase in income (Y) (MPC=.8)					CASE 2: Consumption spending (C) rises by 90 percent of any increase in income (Y) (MPC=.9):
Name	Round	Change in income	Change in spending		Name	Round	Change in income	Change in spending
-----------------	0	---	$100,000		------------------	0	---	$1000,000
	1	$100,000				1	$100,000
	2					2
	3					3
	4					4
	5					5
	6					6

   

CASE 3: Taxes rise by 25 percent of any increase in income, and consumption (C) rises by 80 percent of the extra income left after taxes (DY) (MPC=.80)					CASE 4: Total consumption spending (C) rises by 75 percent of any increase in income (Y) (MPC=.75), but 1/3 of that gets spent on imports, with the rest being spent on domestic output.
Name	Round	Change in income	Change in spending		Name	Round	Change in income	Change in spending
------------------	0	---	$100,000		------------------	0	---	$1000,000
	1	$100,000				1	$100,000
	2					2
	3					3
	4					4
	5					5
	6					6