If marginal propensity to save is 3/4, then the marginal propensity to consume is

In economics, the marginal propensity to consume (MPC) is an empirical metric that quantifies induced consumption, the concept that the increase in personal consumer spending (consumption) occurs with an increase...

Multiplier effect is an effect in economics, in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. If MPS =...

induced consumption expenditure = 0.9*Income

marginal propensity to consume = (consumption spending2 - consumption spending1)/( income2 – income1) = ($13.5 - $12) / ($15-$13) = 0.75

Y=C+IC=a+cYY=200+0.75Y+6000.25Y=800Y=3200Since this answer doesn't exist, I've decided that it is 8000

(4) 4If MPC = 3/4 or 0.75, multiplier is=1/(1-0.75) = 1/0.25 = 100/25 = 4

A change in government spending that can eliminate the gap identified should be equal to the taxation offered to private sector

D. $1,500

(4) 1/4

The answer is A.