The multiplier and the accelerator (OCR A-Level Economics): Quizzes
📚Quizzes
Practise the questions
15 questions from this quiz
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Practise the questions
15 questions from this quiz
What does the multiplier effect describe?
What does the multiplier effect describe?
When spending changes cause greater GDP changes
Which formula calculates the multiplier?
Which formula calculates the multiplier?
What components make up MPW?
What components make up MPW?
Who suggested the multiplier concept in the 1930s?
Who suggested the multiplier concept in the 1930s?
Keynes
When is the multiplier effect smaller?
When is the multiplier effect smaller?
With large leakages in circular flow
When does a low MPS create a large multiplier?
When does a low MPS create a large multiplier?
Less income allocated to saving
What does the national income multiplier measure?
What does the national income multiplier measure?
Ratio of national income change to spending
What is the formula for national income multiplier?
What is the formula for national income multiplier?
What does the accelerator effect describe?
What does the accelerator effect describe?
Investment responds to income change rate
What does multiplier-accelerator interaction cause?
What does multiplier-accelerator interaction cause?
Significant economic fluctuations
What characterises a negative output gap?
What characterises a negative output gap?
Actual output below potential output
What indicates a positive output gap?
What indicates a positive output gap?
Actual output exceeds potential output
How is APC calculated?
How is APC calculated?
If income rises £10,000 and consumption rises £6,000, what is MPC?
If income rises £10,000 and consumption rises £6,000, what is MPC?
0.6
If MPC is 0.8 and govt. spends £100m more, what is the total national income increase?
If MPC is 0.8 and govt. spends £100m more, what is the total national income increase?
£500m