2.4.4 The multiplier

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Question 9

A consortium of energy companies plans to invest $£320\,$ 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 ( $M P S$ ) is 0.12, the marginal propensity to tax ( $M P T$ ) is 0.15, and the marginal propensity to import ( $M P M$ ) is 0.13. Assuming other things remain equal, what will be the total increase in national income (GDP) resulting from this investment?

$£ 192$ million

$£ 533$ million

$£ 800$ million

$£ 128$ million

2.4.4 The multiplier

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

Question 9

A consortium of energy companies plans to invest $£320\,$ 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 ( $M P S$ ) is 0.12, the marginal propensity to tax ( $M P T$ ) is 0.15, and the marginal propensity to import ( $M P M$ ) is 0.13. Assuming other things remain equal, what will be the total increase in national income (GDP) resulting from this investment?

$£ 192$ million

$£ 533$ million

$£ 800$ million

$£ 128$ million

2.4.4 The multiplier

Question 9

2.4.4 The multiplier Questions

2.4.4 The multiplier

Question 9

2.4.4 The multiplier Questions