Economics (AS & A Level) · Oct / Nov 2025 · Paper 34 · Question 17
9708The circular flow of income
In a two-sector economy, autonomous consumer expenditure increases by $100 billion, autonomous investment expenditure increases by $200 billion, and the marginal propensity to consume is 0.5. What will the increase in National Income be?
- A$150 billion
- B$300 billion
- C$450 billion
- D$600 billion
As printed in the paper
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Correct answer: D. $600 billion
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