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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?

0.350.350.35

0.150.150.15

0.250.250.25

0.400.400.40

The multiplier and the accelerator Questions

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