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The multiplier and the accelerator

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Question 6

An economic advisory panel for a developing nation has compiled the following macroeconomic indicators for the current fiscal year:

Macroeconomic Estimates

IndicatorValue
Average Propensity to Consume (APC)0.74
Marginal Propensity to Save (MPS)0.15
Marginal Rate of Taxation (MRT)0.18
Marginal Propensity to Import (MPM)0.12
Capital-output ratio (accelerator coefficient)1.40
Gini coefficient of wealth distribution0.32

Using this information, calculate the value of the national income multiplier.

A

0.450.450.45

B

2.222.222.22

C

3.033.033.03

D

3.703.703.70

Markscheme

The multiplier and the accelerator Questions

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

22 exam-style questions on OCR A Level Economics The multiplier and the accelerator. Each one has a worked solution and a mark scheme showing where the marks go.

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