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The multiplier and the accelerator

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Question 5

Which of the following combinations of macroeconomic changes is most likely to cause a decrease in the size of an economy's national income multiplier?

A rise in the household saving ratio and a reduction in import tariffs that increases the marginal propensity to import (MPMMPMMPM)

A decrease in the basic rate of income tax and a fall in the household saving ratio

An increase in the marginal propensity to consume domestic goods (MPCdMPCdMPCd) alongside a reduction in corporate tax rates

A rise in business confidence that stimulates investment via the accelerator effect, alongside a decrease in the marginal propensity to import (MPMMPMMPM)

The multiplier and the accelerator Questions

  1. A Level
  2. /Economics
  3. /The multiplier and the accelerator