The Multiplier and National Income Determination
37 questions· page 1 of 4
With the help of an injections and withdrawals graph, assess the impact of a decrease in interest rates on the level of employment in an economy.
In many countries increased government spending is regarded as a cause of economic growth. It is sensible, therefore, for a government to spend more to increase economic growth as it is good for its country.
To what extent do you agree with this argument?
With the help of a diagram, assess the effectiveness of using fiscal policy to close a negative output gap in an economy
Government policies which rely on increasing budget deficits to solve the problem of unemployment will not be successful because they do not affect the natural rate of unemployment.
Discuss the extent to which you agree with this statement.
With the help of a circular flow diagram discuss how a policy of export-led growth might affect the standard of living in a developing economy.
With the help of a circular flow diagram discuss how a policy of export-led growth might affect the standard of living in a developing economy.
Explain why an economy might be in equilibrium at less than a full employment level of output and critically evaluate alternative policy measures which might be used to move the economy to a full employment level of output.
Explain what economists mean by the marginal propensity to consume and consider the importance of this concept in relation to government macroeconomic policy.
Discuss what determines the level of savings in an economy and assess the impact of an increase in the level of savings upon economic growth and employment.
Evaluate how the relative size of injections into and leakages from the circular flow of income can affect the ability of a government to achieve its macroeconomic aims.
Recession in some economies has caused high unemployment. At the same time high levels of national debt and substantial budget deficits have been experienced.
This means that governments can no longer use Keynesian demand management policies to solve the problem of unemployment.
To what extent do you agree with this conclusion?