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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.

0.450.450.45

2.222.222.22

3.033.033.03

3.703.703.70

The multiplier and the accelerator Questions

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