An economy receives an initial fiscal injection of £11.6 billion from a government program dedicated to upgrading aerospace manufacturing facilities. The marginal propensity to consume (MPC) in this economy is estimated to be 0.75.
Calculate the total final increase in aggregate demand resulting from this injection, assuming no other changes in the economy.
75 exam-style questions on Edexcel A A Level Economics 2.4 National income, covering 2.4.1 National income, 2.4.2 Injections and withdrawals, 2.4.3 Equilibrium levels of real national output, and 2.4.4 The multiplier. Each one has a worked solution and a mark scheme showing where the marks go.