The multiplier and the accelerator

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Question 10
Easy

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.

0.600.600.60

1.671.671.67

2.862.862.86

5.565.565.56

The multiplier and the accelerator Questions

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