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Edexcel IAL Economics 2.3.4.4b marginal propensities and multiplier effe

Practise judging how MPC, MPS, MPT and MPM alter the multiplier, including common multiple-choice decisions on leakages.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • distinguish injections from withdrawals when deciding whether the multiplier rises or falls
  • predict how a change in MPS, MPT, MPM or MPC affects the value of the multiplier

2.3.4.4b - Marginal propensities and their effects on the multiplier: • the marginal propensity to question 1

[Maximum number: 1]

The value of Burundi's multiplier is estimated to be approximately 0.1.
Ceteris paribus, which one of the following would cause an increase in the value of a country's multiplier?

A

An increase in the marginal propensity to save

B

An increase in the marginal propensity to import

C

A decrease in the marginal propensity to tax

D

A decrease in the marginal propensity to consume

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