2013 Nov (Multiplier) Paper 3 HL

2013 Nov (Multiplier) Paper 3 HL

(c) (i) Using the data in table 2, calculate the value of the Keynesian multiplier in South Korea.

1/ (.3 + .3 + .2) = 1.25

(ii) Using the multiplier calculated in (c) (i), calculate the change in South Kore’s real GDP brought about the rise in its exports from 2009 to 2010.

 

Change in exports = $448b - $412b = $36b

 

$36b x 1.25 = $45b

 

(iii) On the axes below, draw an appropriate AD/AS diagram and use it to explain the impact on South Korean RGDP of the change in South Korean exports from 2009 to 2010.

As exports increase aggregate Demand increases thus leading to an increase in real GDP.