What is the multiplier ratio?
A
The initial injection raises income for its recipients, who spend part of it; this spending becomes others' income and is partly re-spent in further rounds.
B
The ratio of the final change in national income to the initial change in injections.
C
A higher MPC means more income is re-spent in each round, producing a larger multiplier.
D
The marginal propensity to withdraw: the fraction of extra income that leaks out through saving, tax and imports.
2.4.4 The multiplier Flashcards
Flashcards for Edexcel A A Level Economics 2.4.4 The multiplier, covering the key terms, economic models and case studies you need to recall for Paper 1, Paper 2 and Paper 3. 23 cards, matched to the Edexcel A A Level Economics (9EC0) specification.