Help! again! (2 Viewers)

[gamecw]

http://img172.imageshack.us/my.php?image=eco2tp8.jpg

how wud u do Q23(b)?? sorry but im really crap at economics

 

[stickywages]

Is the answer, 2.5?
That's what I got..

 

[gamecw]

i dunno can u show me how?

 

[Sparcod]

MPC=Change in consumption/ change in income

k= 1/1-MPC


k=2.5

 

[stickywages]

That's it.

 

[s2indie]

2.5 is correct.

MPS = 0.4 (MPC + MPS = 1)

k = 1/0.4
k = 2.5

err.. yeh badly explained..

 

[gamecw]

cool thanks! PLZ STAY ONLINE ALL NIGHT LOL
i have too much to learn n ask!! my last exam, i cant screw this one!!!

 

[gamecw]

part c of this question

Outline how the cimple multiplier can afffect the ecnomic activity




sorry can sumone give me an sample answer for this one tx

 

[mitsui]

multiplier is simply the multified effect of a change in spending on income

effect would be, a small increase of AD can lead to much larger increase in Y, O, E, thusby stumli the economic activities