Economics (AS & A Level) · May / June 2026 · Paper 32 · Question 16

In a closed economy, households pay $0.20 in tax on every $1 increase in their gross income, and spend 3/4 of every increase in their disposable income. What is the value of the multiplier?

1. A2
2. B2 1/2
3. C3
4. D6

As printed in the paper