If the marginal propensity to consume is 0.5, then the multiplier is 2 and the $25 billion increase in government spending would increase aggregate demand by a total of $50 billion. (Enter your responses rounded to one decimal place.)

The multiplier is what determines that how much of an injection actually impacts the economy. This means that an injection by the Government in the economy $1 usually has an increased net effect by the value of the multiplier.

Multiplier is calculated as

Multiplier = 1 / 1-Mpc, where Mpc = marginal propensity to consume

So we verify the multiplier,

Multiplier = 1 / 1 - 0.5 = 2

thus the injection of $50 Billion is brought by an initial government injection of 50/2 = $25 billion.

This thus confirms the statements.

Hope that helps.

If the marginal propensity to consume is 0.5​, then the multiplier is 2 and the ​$25 billion increase in government spending would increase aggregate demand by a total of ​$50 billion. ​(Enter your responses rounded to one decimal​ place.)

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If the marginal propensity to consume is 0.5, then the multiplier is 2 and the $25 billion increase in government spending would increase aggregate demand by a total of $50 billion. (Enter your responses rounded to one decimal place.)