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Economics (AS & A Level) · May / June 2024 · Paper 33 · Question 19

9708The circular flow of income

What is a necessary assumption of the Keynesian multiplier model?

  1. Aincreasing average propensity to save
  2. Bflexible costs and prices
  3. Cfull employment of resources
  4. Dopen economies

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Correct answer: A. increasing average propensity to save

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