2007 HSC

The Marginal Propensity to Consume (MPC) for an economy is 0.8. An

increase in investment leads to an increase in national income of $250m.
Other things being equal, what is the value of the increase in investment?
(A) $50m
(B) $150m
(C) $200m
(D) $312.5m
2006 HSC

Other things being equal, if an increase of $90m in investment expenditure

resulted in an increase in national income of $225m, what is the value of the
Marginal Propensity to Consume (MPC)?
(A) 0.25
(B) 0.4
(C) 0.6
(D) 2.5
The table shows selected data for an economy.
Year
CPI
Money GDP
($bn)
1

600.0

100

750.0

110

820.0

125

900.0

130

According to the information in the table, what is the real GDP ($bn) in Year 3
compared to the base year?
(A) $656.0
(B) $721.6
(C) $931.8
(D) $1025.0

HSC 2005

The table shows selected data for an economy over a one-year period.
Initial change
in investment
expenditure
($m)

Marginal
propensity
to consume
(MPC)

Marginal
propensity
to save
(MPS)

400

Change in
equilibrium
national
income
($m)
2000

According to the information in the table, what are the values of MPC and
MPS?
(A) MPC is 5.0 and MPS is 5.0
(B) MPC is 0.5 and MPS is 0.5
(C) MPC is 8.0 and MPS is 2.0
(D) MPC is 0.8 and MPS is 0.2

HSC 2004
An increase in investment expenditure of $100m changes the equilibrium
level of
national income by $250m. What is the size of the Marginal Propensity to
Consume?
(A) 0.4
(B) 0.6
(C) 1.25
(D) 2.50
The table shows selected data for an economy.
National
income
components

($
million)

Savings

50

Investment
Taxation

30
40

Exports

50

Government
spending

20

Imports

30

Using the information in the table, which

correct for this economy?
(A) There is a budget deficit.
(B) The economy is in equilibrium.
(C) There is a current account deficit.
(D) Withdrawals are greater than

statement is

injections.

2003 HSC

Which of the following could be a consequence of an increase in real Gross

Domestic
Product?
(A) An increase in consumption and an increase in taxation revenue
(B) A decrease in consumption and a decrease in taxation revenue
(C) An increase in consumption and a decrease in taxation revenue
(D) A decrease in consumption and an increase in taxation revenue

Which of the following is regarded as a measure of a nations external

stability?
(A) Net income as a percentage of Gross Domestic Product
(B) Net foreign debt as a percentage of Gross Domestic Product
(C) Net services as a percentage of Gross Domestic Product
(D) Net transfers as a percentage of Gross Domestic Product
What is the equilibrium level of income if C = 100 + 0.8Y and I = 40?
(A) 100
(B) 140
(C) 500
(D) 700
The table shows the marginal propensity to consume for an economy.
What does the table indicate about the size of the simple multiplier for
this economy?
Year
1

Marginal Propensity to Consume

(MPC)
0.2

2
3
(A) It was highest in Year 1.
(B) It was lowest in Year 3.
(C) It increased between Years 1 and 3.
(D) It doubled between Years 2 and 3.

0.3
0.6