Question

If the average u.s. consumer spends an additional 98 cents out of each additional dollar that he/she earns, what would the expenditure multiplier be?

Answer 1

Well, according to my knowledge if the average u.s. consumer spends an additional 98 cents out of each additional dollar the he/she earns, than the average expenditure multiplier should be 4000 dollar because the average american earn 5000 to 12000 dollar and expend too many for own.