00:01
So let's try to work through the multiplier process here, right? so first we have plus one spending, right? something starts the multiplier process.
00:10
And then that, right, increases national income by one.
00:15
But this increases consumption by one times the marginal propensity to consume, right? that's what the marginal propensity is saying.
00:29
As income increases by one, the marginal propensity to consume, increases as well.
00:34
But now, remember that y is equal to c plus i plus g plus nx.
00:41
So c is increasing y as well.
00:46
But now when y increases, you get c increasing again, and this chain continues.
00:53
So the total here would be equal to 1 plus 0 .0...