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Assume the following information is given about an economy:
Marginal propensity to consume (mpc) = 0.50
Marginal propensity to tax (mpt) = 0.10
Marginal propensity to import (mpm) = 0.30
Investment injection = $100 million
(i) Calculate the value of the multiplier. (5)
(ii) Calculate the change in equilibrium level of national income. (5)
Marginal propensity to consume (mpc) = 0.50
Marginal propensity to tax (mpt) = 0.10
Marginal propensity to import (mpm) = 0.30
Investment injection = $100 million
(i) Calculate the value of the multiplier. (5)
(ii) Calculate the change in equilibrium level of national income. (5)
describe the relationship between the income flow and the expenditure flow as they each relate to Gross Domestic Product (GDP).
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#339914 on Dec 2023
#339914 on Dec 2023