{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

105-Multiplier_Revision_Worksheet

105-Multiplier_Revision_Worksheet - IB Economics...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
IB Economics www.tutor2u.com IB Economics Resources www.tutor2u.com Multiplier Revision Worksheet (Higher Level Only) This concept relates directly to the circular flow of income . The national income multiplier considers how an increase in injections into the circular flow will change the level of national income in the economy. To recap- Injections : Investment (I), Government Spending (G) and Exports (X) Withdrawals : Saving (S), Taxation(T) and Imports (M) If there is an injection into the circular flow the increase in national income will depend upon the level of withdrawals in that economy. Marginal Propensity The concept of marginal propensity considers the proportion of an increase in consumer’s income that will be spent on the variable under consideration. For example the marginal propensity to consume (mpc) measures the increase in personal consumption following an increase in income. E.g if the mpc is 0.6 this implies that if the individual receives an extra £1 of income they will spend 60p.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern