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Pearson Edexcel IAL Economics 2.3.4.4c Calculations of the multiplier us

Practise calculating multiplier values and final income changes from MPC or withdrawal data in tables, extracts and short scenarios.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • calculate the multiplier from MPC using 1/(1-MPC) and select the correct value
  • use MPS, MPT and MPM data to calculate MPW and the multiplier from a table
  • apply the multiplier to an injection to calculate the final change in national income

2.3.4.4c - Calculations of the multiplier using the formula 1/(1-MPC) and 1/MPW, where MPW = MPS + question 1

[Maximum number: 1]

In Denmark the marginal propensity to consume is estimated to be 0.49 .
Based on this estimate, which one of the following is the value of the multiplier for Denmark?

A

0.51

B

1.96

C

2.04

D

4.90

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