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The multiplier and the accelerator

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Question 9

The table below shows select macroeconomic data collected for an island economy during a fiscal year.

Table: Key Macroeconomic Indicators

Economic IndicatorValue
Capital-output ratio (Accelerator coefficient)1.50
Marginal Propensity to Save (MPS)0.18
Marginal Rate of Taxation (MRT)0.25
Marginal Propensity to Import (MPM)0.17
Gini coefficient0.42

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

A

0.600.600.60

B

1.671.671.67

C

2.862.862.86

D

5.565.565.56

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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