1) If mpc equals .8, using the multiplier effect, we would see that the actual amount of money contributing to RGDP would be $250 billion, not only $50 billion. If consumption were increased by $50 billion, the change in disposable income would be $62.5 billion.
2) Consumption can change if expectations change. If people expect growth and have confidence in spending, they will consume more even if they do not have more disposable income. Government spending can also effect changes in consumption if there are less jobs available, there is less consumer spending confidence.
Clear and concise.
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