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The Simple Multiplier
(table)
1. Refer to the data above. The
marginal propensity to consume (MPC) is:
1. 0.20
2. 0.25
3. 0.70
4. 0.80
2. Refer to the data above. If GDP
was $350 we would expect consumption to be:
1. $350
2. $325
3. $305
4. $290
3. Refer to the data above. What is
the spending multiplier (simple multiplier)?
1. 1
2. 2
3. 3
4. 4
5. 5
4. Refer to the data above. Assume
the equilibrium GDP is $250. If $10 in investment is added
to this economy, what would the new equilibrium GDP
be?
1. $250
2. $260
3. $275
4. $300
5. $325
The Simply Multiplier
(graph)
What increase in Investment will
cause GDP to increase by $75 and achieve full
employment?
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