Question 1
If MPW = 0.5, the multiplier is:
A.
5 B.
1 C.
0.5 D.
2
Question 2
What is meant by mpm?
A.
Extra imports per extra £ of income. B.
Extra consumption per extra £ of income. C.
Spending not caused by current Y (e.g. ΔG). D.
Keynesian: larger multiplier when below Yfe.
Question 3
What is meant by k = 1 ÷ mpw?
A.
Spending not caused by current Y (e.g. ΔG). B.
Fall in spending causes larger fall in Y. C.
Extra consumption per extra £ of income. D.
Smaller leakages → larger multiplier.
Question 4
What is meant by multiplier (k)?
A.
Final change in national income ÷ initial injection. B.
Extra saving per extra £ of income. C.
Spending not caused by current Y (e.g. ΔG). D.
Marginal propensity to withdraw = MPS + MPT + MPM.
Question 5
MPW equals:
A.
MPS + MPT + MPM B.
MPC + MPS only C.
X − M D.
C + I + G
Question 6
What is meant by mpt?
A.
Extra imports per extra £ of income. B.
Spending not caused by current Y (e.g. ΔG). C.
Marginal propensity to withdraw = MPS + MPT + MPM. D.
Extra tax per extra £ of income.
Question 7
Higher marginal propensity to import:
A.
Has no effect B.
Increases the multiplier C.
Eliminates tax D.
Reduces the multiplier
Question 8
A £10m injection with k = 2 raises national income by:
A.
£2m B.
£20m C.
£10m D.
£5m
Question 9
What is meant by mps?
A.
Fall in spending causes larger fall in Y. B.
Extra saving per extra £ of income. C.
Final change in national income ÷ initial injection. D.
Keynesian: larger multiplier when below Yfe.
Question 10
What is meant by mpw?
A.
Spending not caused by current Y (e.g. ΔG). B.
Marginal propensity to withdraw = MPS + MPT + MPM. C.
Fall in spending causes larger fall in Y. D.
Smaller leakages → larger multiplier.
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