2 Why the multiplier is greater than 1 "Initial change:△Y,=△G Second change:△Y,=MPCX△G Third change:△Y,=MPC2X△G ■△Y=△Y,+△Y,+△Y3+. -(1+MPC +MPC2+MPC3 +.XAG AY 1-MPCG CHAPTER 10 Aggregate Demand I slide 14CHAPTER 10 Aggregate Demand I slide 14 Why the multiplier is greater than 1 ▪ Initial change：△Y1＝△G Second change： △Y2＝MPC×△G Third change： △Y3＝MPC2×△G . ▪ △Y＝△Y1＋△Y2＋△Y3＋. ＝(1＋MPC＋MPC2＋MPC3＋.)×△G 2 1 1 MPC Y G    =       −