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Economics (AS & A Level) · May / June 2025 · Paper 32 · Question 15

9708The circular flow of income

An initial injection into the circular flow of income causes a much larger increase in GDP. What does this define?

  1. Aautonomous investment
  2. Bdemand-pull inflation
  3. Cthe accelerator principle
  4. Dthe national income multiplier

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Correct answer: D. the national income multiplier

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