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Thursday, August 6, 2020

2019 Nov (Multiplier) Paper 3 HL

2019 Nov (Multiplier) Paper 3 HL

If the MPC is .75 then the MPS = .25 the Multiplier Formula = 1/MPS

1/ .25 = 4, The Multiplier is 4

Investment increased by 11 million x 4 = 44m increase in RGDP

Government Spending decreased by 8 million x 4 = 32m decrease in RGDP

Therefore RGDP actually increased by 44 – 32 = 12m gamma

Posted by EconowaughAP at 10:14 AM No comments:

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