According to the Ministry of Finance in a European economy, the nation's marginal propensity to consume (MPC) is estimated to be 0.75.
Using the information above, calculate the total reduction in this economy's GDP from a fall in government spending of €45 million.
75 exam-style questions on Edexcel A A Level Economics 2.4 National income, covering 2.4.1 National income, 2.4.2 Injections and withdrawals, 2.4.3 Equilibrium levels of real national output, and 2.4.4 The multiplier. Each one has a worked solution and a mark scheme showing where the marks go.