Practise IB Economics HL 3.6.4 by explaining how the Keynesian multiplier links changes in spending to changes in national income with marked exam evidence.
Table 1 provides information required for the calculation of a consumer price index (CPI). It shows a typical basket of goods purchased by the citizens of Country Alpha and the prices of these goods for two consecutive years. Assume 2015 is the base year, when the cost of the typical basket was $45.00.
Table 1
Calculate the estimated value of the multiplier used by the economist.
Calculate the estimated value of the marginal propensity to consume used by the economist.
A worker in Country J can produce either 12 kilograms (kg) of rice or 4 kg of wheat per hour. A worker in Country H can produce either 14 kg of rice or 7 kg of wheat per hour.