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The multiplier and the accelerator

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Question 8

What is the multiplier effect?

A

An initial injection into the circular flow of income leads to a larger final increase in national income

B

An increase in the rate of economic growth leads to a more-than-proportionate increase in investment

C

A rise in interest rates reduces the level of investment and dampens consumption

D

An increase in tax rates generates higher tax revenue up to a certain point, after which revenue falls

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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