9. Topic 9(COLON) Aggregate Demand, Aggregate Supply and Macroeconomic Equilibrium
Lesson 9.4: The Multiplier And The Accelerator — Quiz
Test your understanding of lesson 9.4: the multiplier and the accelerator with 5 practice questions.
Practice Questions
Question 1
What is the formula to calculate the simple multiplier based on the marginal propensity to consume (MPC)?
Question 2
If the marginal propensity to consume (MPC) is 0.75, what is the value of the simple multiplier?
Question 3
Which of the following factors can limit the size of the multiplier effect in practice?
Question 4
What does the accelerator effect explain in relation to investment?
Question 5
If the initial injection into the economy is $10 million and the simple multiplier is $5, what is the total effect on income?