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The multiplier and the accelerator

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Question 7

An economy has a national income multiplier of 2.5. The government estimates that the marginal rate of taxation is 0.14 and the marginal propensity to import is 0.11. Assuming these are the only leakages alongside saving, what is the marginal propensity to save (MPSMPSMPS) for this economy?

A

0.350.350.35

B

0.150.150.15

C

0.250.250.25

D

0.400.400.40

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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