The real autonomous consumption where the multiplier is equal to 5, current equilibrium
Concept introduction:
MPC: Marginal propensity to consume is the percentage of the additional unit of currency that is consumed when the individual earns one more unit of currency.
Multiplier: K = 1 / (1-MPC)= 1 / MPS, where K is multiplier
Consumption: Portion of the consumed by the Individual.
As, Y = C + I + G, where Y stands for GDP, C for consumption, I for investment, G for government expenditure. Not taking net exports just for simplicity.
Also, Consumption (C) = Autonomous consumption + {MPC x (Income (Y) − Taxes (T))}
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