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2.4.4 The multiplier

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Question 9

A consortium of energy companies plans to invest £320 £320\,£320 million in a new deep-water wind turbine assembly hub in the Humber region. An economic impact assessment estimates that in this regional economy, the marginal propensity to save (MPSMPSMPS) is 0.12, the marginal propensity to tax (MPTMPTMPT) is 0.15, and the marginal propensity to import (MPMMPMMPM) is 0.13. Assuming other things remain equal, what will be the total increase in national income (GDP) resulting from this investment?

A

£192£192£192 million

B

£533£533£533 million

C

£800£800£800 million

D

£128£128£128 million

Markscheme

2.4.4 The multiplier Questions

  1. A Level
  2. /Economics
  3. /2.4.4 The multiplier

43 exam-style questions on Edexcel A A Level Economics 2.4.4 The multiplier. Each one has a worked solution and a mark scheme showing where the marks go.

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