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Edexcel A-Level Economics AS 2.3.4 4c Calculations of the Multiplier Using the Formula 1 1 Mpc and 1 Mpw Where Mpw Mps Questions

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), with appropriate rounding
  • sum MPS, MPT and MPM to find MPW, then calculate the multiplier as 1/MPW
  • multiply an autonomous injection by the multiplier to calculate the final change in national income
  • use the final income change divided by the injection to find the multiplier, then rearrange for MPC

Edexcel A-Level Economics AS 2.3.4 4c Calculations of the Multiplier Using the Formula 1 1 Mpc and 1 Mpw Where Mpw Mps Questions 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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