The MPC, the MPS and the Keynesian spending multiplier

We know that an increase in spending will lead to an increase in GDP. But did you know that when one component of AD increases, it will lead to a larger overall increase in AD across the economy? This video introduces the marginal propensities to consume and save and the Keynesian spending multiplier, which allows us to estimate the degree by which a particular change in spending will impact overall GDP in an economy.

• #
• #ap_macro
• #ib_economics
• #macroeconomics
• #multiplier
• #mpc
• #mps
• #marginal_propensity_to_consume
• #ad_as