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if the mpc in an economy is 0.9, a $1 billion increase in government spending will ultimately increase consumption by

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abiolataiwo2015

If the mpc in an economy is 0.9, a $1 billion increase in government spending will ultimately increase consumption by $9 billion.

How to find the increase in consumption?

Using this formula to determine the increase in consumption

increase in consumption = Marginal propensity to consume (MPC) × Government spending

Where:

MPC = 0.9

Government spending = $1 billion

Let plug in the formula

Increase in consumption = 0.9 × $1 billion

Increase in consumption = $9 billion

Therefore the consumption will increase by $9 billion .

Learn more about Marginal propensity to consume(MPC)  here:https://brainly.com/question/20376297

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