Answer: $240,000
Explanation:
When given the Marginal Propensity to Consume (MPC), it is possible to calculate the multiplier which will then show how much the Economy will grow by given a change in government expenditure. This is because MPC measures how much of income is spent when income increase.
Multiplier = [tex]\frac{1}{1-MPC}[/tex]
= [tex]\frac{1}{1-0.75}[/tex]
= 4
Effect on Real GDP = Government Spending * Multiplier
= 60,000 * 4
= $240,000
