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Economics (AS & A Level) · May / June 2023 · Paper 32 · Question 21

9708The circular flow of income

Which condition will produce the highest value of the national income multiplier in an open economy with a government sector?

  1. Ahigh average and marginal tax rates
  2. Bhigh marginal propensity to save
  3. Clow level of autonomous consumption
  4. Dlow marginal propensity to import

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Correct answer: D. low marginal propensity to import

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