The Welsh Government has published a feasibility study for the Severn Estuary Tidal Lagoon project. The Treasury predicts that the initial autonomous capital investment injection required to construct this tidal lagoon system will be £13.8 billion. Econometric forecasting models indicate that this initial stimulus will lead to a total cumulative increase in national income of £49.5 billion across the regional economy.
Assuming that the total cumulative increase in national income as a result of the Severn Estuary Tidal Lagoon project is £49.5 billion, use the information in Extract D to calculate, to two decimal places, the value of the national income multiplier.
222 exam-style questions on AQA A Level Economics 2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts, covering 2.2.1 The circular flow of income, 2.2.2 Aggregate demand and aggregate supply analysis, 2.2.3 The determinants of aggregate demand, 2.2.4 Aggregate demand and the level of economic activity, 2.2.5 Determinants of short-run aggregate supply, and 2.2.6 Determinants of long-run aggregate supply. Each one has a worked solution and a mark scheme showing where the marks go.