Table 2 shows the components of aggregate demand in an economy which is in equilibrium.
| Component | £ billion |
|---|---|
| Consumer expenditure | 800 |
| Investment | 150 |
| Government expenditure | 250 |
| Exports | 100 |
| Imports | 120 |
If imports increase to £160 billion and the multiplier is 2.0, then the new level of national income would be
£1100 billion
£1140 billion
£1180 billion
£1260 billion
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.