Economics (AS & A Level) · May / June 2021 · Paper 31 · Question 24

What describes the multiplier process, as it operates within a closed economy with no government sector?

1. AChanges in National Income determine the level of investment.
2. BThe level of consumption depends on the level of National Income.
3. CThe levels of consumption and investment together determine the level of National Income.
4. DWhen investment changes, there will be a greater change in equilibrium National Income.

As printed in the paper