Skip to content

Course home

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

Easy Medium Hard

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 15

In an open economy with a government sector, the marginal propensity to save ( $MPS\text{MPS}$ ) is 0.15, the marginal propensity to tax ( $MPT\text{MPT}$ ) is 0.10, and the marginal propensity to import ( $MPM\text{MPM}$ ) is 0.15.

What is the resulting change in national income if the government increases its expenditure on public infrastructure by $£18bn£18\text{bn}$ ?

A

$£7.2bn£7.2\text{bn}$

B

$£30.0bn£30.0\text{bn}$

C

$£45.0bn£45.0\text{bn}$

D

$£120.0bn£120.0\text{bn}$

Markscheme

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

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

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.

Question bank