Economics 9708 · AS & A Level · Economic growth

Economic growth — practice question

In a closed economy with no government, the marginal propensity to consume is 0.9. Full employment national income equals $60 000 m, while the economy’s present national income is $40 000 m. To bring about full employment, by what amount must investment be raised?

  • A$2000 m
  • B$6000 m
  • C$18 000 m
  • D$20 000 m

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