Economics question - HELP!!!! (1 Viewer)

[J2good4u]

Hey guys, could someone please explain the multiplier question in the 2010 HSC. It's question 12 of the multiple choice.

 

[amidstreality]

basically, you're trying to find the MPS. (or 1-MPC, but you can just find MPS straight off)
because we know that Y=C+S, the Y and S for each year goes like this:
Y 150 350 550
S 50 150 250

So every year, Y increases by 200, and S increases by 100. Therefore, your MPS is 100/200, or 0.5

Therefore, your multiplier is 1/0.5 = 2.

 

[J2good4u]

That's what i thought! but the answers say that it's (A) which is 0.2

 

[amidstreality]

The answers say D o___o;

 

[J2good4u]

Wow, too much stress. Thanks a lot, really appreciate it

 

[J2good4u]

Can you help me out with multiple choice q18 2009 HSC

 

[amidstreality]

Haha no problem, good luck!

 

[amidstreality]

eep, just caught me right before I went off.
with these questions I just look at how much it increases - Y increases 100 each time, and C increases by 50. However, in the last year C increases by 100, which is twice the usual, so therefore you make the Y increase twice the usual so that it equals 200.

so, in adding the $200 to the Year 4 $600, you get $800, which is D.

 

[J2good4u]

lol ok thank you soooo much