Changing Levels of Growth: The Multiplier Process (HSC SSCE Economics): Quizzes
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Practise the questions
10 questions from this quiz
What is the multiplier?
What is the multiplier?
Greater-than-proportional rise in income
Which economist developed the multiplier process concept?
Which economist developed the multiplier process concept?
John Maynard Keynes
What is the relationship between MPC and MPS?
What is the relationship between MPC and MPS?
What is the formula for calculating the multiplier?
What is the formula for calculating the multiplier?
If MPS is 0.25, what is the multiplier?
If MPS is 0.25, what is the multiplier?
4
If investment rises by 10,000 USD and the multiplier is 5, what is the total income change?
If investment rises by 10,000 USD and the multiplier is 5, what is the total income change?
50,000 USD
How does a larger MPS affect multiplier size?
How does a larger MPS affect multiplier size?
Produces a smaller multiplier
What does MPC measure?
What does MPC measure?
Proportion of extra income spent
Does the multiplier work for decreases in spending?
Does the multiplier work for decreases in spending?
Yes, it works both ways
What role do savings play in the multiplier?
What role do savings play in the multiplier?
Act as a leakage