MARGINAL PROPENSITY FOR GOVERNMENT PURCHASES: The proportion of each additional dollar of national income that is used for government purchases. Or alternatively, this is the change in government purchases due to a change in national income. Abbreviated MPG, the marginal propensity for government purchases is the slope of the government purchases line used in the analysis of Keynesian economics. As such, it also plays a role in the slope of the aggregate expenditure line and the multiplier effect.

     See also | government purchases | national income | government purchases line | Keynesian economics | multiplier | aggregate expenditures line | marginal propensity to consume | marginal propensity to save | marginal propensity to import | marginal propensity to invest |

MARGINAL PROPENSITY FOR GOVERNMENT PURCHASES, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: December 12, 2018].

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A shock to the long-run aggregate market caused by an increase in aggregate demand resulting in and illustrated by a rightward shift of the aggregate demand curve. An increase in aggregate demand in the long-run aggregate market results in an increase in the price level but no change in real production. The level of real production resulting from the aggregate demand shock is full-employment real production.

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