Economics (AS & A Level) · May / June 2025 · Paper 31 · Question 15
9708The circular flow of income
In an economy with no government sector or foreign trade, the marginal propensity to consume is 0.6. If the equilibrium level of national income is $10000 million and the full employment level of national income is $15000 million, by how much would investment have to increase to achieve full employment?
- A$1666 million
- B$2000 million
- C$3012 million
- D$5000 million
As printed in the paper
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Correct answer: B. $2000 million
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