If the mpc in an economy is 0.9, a $1 billion increase in government spending will ultimately increase consumption by $9 billion.
How to find the increase in consumption?
Using this formula to determine the increase in consumption
increase in consumption = Marginal propensity to consume (MPC) × Government spending
Where:
MPC = 0.9
Government spending = $1 billion
Let plug in the formula
Increase in consumption = 0.9 × $1 billion
Increase in consumption = $9 billion
Therefore the consumption will increase by $9 billion .
Learn more about Marginal propensity to consume(MPC) here:https://brainly.com/question/20376297
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