k = 5.00 · ΔY = £50.0bn
Working: k = 1 ÷ (1 − 0.8) = 5.00; ΔY = 5.00 × £10bn = £50.0bn
Interpretation: A £10.0bn injection raises national income by £50.0bn (5.0× the initial spending).
Using the multiplier
Calculate k from MPC, then multiply by your injection to get ΔY — the total change in national income. Example: k = 5 and a £8bn rise in G → national income rises by £40bn. In an open economy, leakages (saving, tax, imports) reduce k via MPW.