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Aggregate demand and aggregate supply

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Question 17

An economy has the following marginal leakages:

  • Marginal propensity to save = 0.10
  • Marginal rate of taxation = 0.10
  • Marginal propensity to import = 0.05

Its government plans to increase national income (GDP) from €600bn to €720bn. By how much should government spending increase in order to achieve this objective?

€30bn

€48bn

€120bn

€480bn

Aggregate demand and aggregate supply Questions

  1. A Level
  2. /Economics
  3. /Aggregate demand and aggregate supply