An economy receives an initial fiscal injection of £8.5 billion from a government-funded digital infrastructure project. The marginal propensity to consume (MPC) in this economy is estimated to be 0.6.
Calculate the total final increase in aggregate demand as a result of this policy, assuming no other changes.
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.