2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97

Question 52

In an open economy with government intervention, the marginal propensity to save is 0.15, the marginal propensity to tax is 0.10, and the marginal propensity to import is 0.25.

If there is an autonomous increase in private investment of $billion£12\text{ billion}$ , what are the resulting value of the multiplier ( $k$ ) and the final change in the equilibrium level of national income ( $ΔY\Delta Y$ ) through the circular flow of income?

$k = 4.0$ and $billion\Delta Y = +£48\text{ billion}$

$k = 0.5$ and $billion\Delta Y = +£6\text{ billion}$

$k = 2.0$ and $billion\Delta Y = +£24\text{ billion}$

$k = 2.0$ and $billion\Delta Y = +£6\text{ billion}$

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

Question 52

In an open economy with government intervention, the marginal propensity to save is 0.15, the marginal propensity to tax is 0.10, and the marginal propensity to import is 0.25.

$k = 4.0$ and $billion\Delta Y = +£48\text{ billion}$

$k = 0.5$ and $billion\Delta Y = +£6\text{ billion}$

$k = 2.0$ and $billion\Delta Y = +£24\text{ billion}$

$k = 2.0$ and $billion\Delta Y = +£6\text{ billion}$

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

Question 52

Markscheme

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

Question 52

Markscheme

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

Question 52

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts Questions

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

Question 52

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts Questions