In a simple Keynesian model, the formula for equilibrium income is Y = C + I + G, where Y = aggregate supply, C = consumption, I = investment, and G = government expenditure. The Motley Fool has a ...

MPS is used to calculate the expenditures multiplier using the following formula: 1/MPS The expenditures multiplier tells us how changes in consumers’ MPS influences the rest of the economy.

Calculating gross domestic product, or GDP, with the expenditure approach is the same as the formula for aggregate demand.