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A2 ECONOMICS: Guess Paper-4

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Fazila

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In a closed economy with no government, the value of the investment multiplier is 5.
By how much will

consumption increase, if investment increases by $300?
A $540 B $1000 C $1200 D $1500
Answer is 1000 ?
How ?
 
Qamar Baloch

Qamar Baloch

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Fazila said:
In a closed economy with no government, the value of the investment multiplier is 5.
By how much will

consumption increase, if investment increases by $300?
A $540 B $1000 C $1200 D $1500
Answer is 1000 ?
How ?
Click to expand...
already explained.
 
memyself

memyself

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The economy is in equilbrium at a national income of 100m. Capital stock is 25m. Aggregate demand increases by 10m. What is the increase in net investment?

Qamar Baloch
 
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Bint

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memyself said:
The economy is in equilbrium at a national income of 100m. Capital stock is 25m. Aggregate demand increases by 10m. What is the increase in net investment?

Qamar Baloch
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this is the accelator thing.. so it will (25/100) *10 and the answer will be 2.5 i guess this is how it will be done
 
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naheelnisar

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AGEG said:
Because E is unattainable since it is beyond the PPC and it is only potential level of output, the answer would be D since the point H must be productively efficient since it is on the PPC but is not necessarily allocatively efficient.
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i dunt get this may not be economically efficient wala part in the option D:s
 
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