According to the Keynesian cross model, if the marginal propensity to consume is 0.9, and government spending rises by $200, then equilibrium output rises by $380.

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In the Keynesian cross model, the multiplier is 1/(1-MPC), where MPC is the marginal propensity to consume. If MPC is 0.9, the multiplier is 1/(1-0.9) = 10. Therefore, if government spending rises by $200, the equilibrium output rises by 10 * $200 = $2000, not $380.

According to the Keynesian Cross Model, If the Marginal Propensity