Threshold Network Exercise: the changing value of the multiplier 1 Scenario Over the past 30 years, and particularly since our entry into the EU, imports (and exports) as a proportion of GDP have risen considerably in the UK. What effect has this had on the value of the multiplier in the UK? What implication does this have for the effect of an increase in government expenditure on the economy? Write your answer either hard copy or in your own word processing file in order to compare to our feedback. In doing this you should: (1) Consider an economic framework or model that you think is going to be useful. (2) Identify three important economic concepts from the list below you would use in answering this question and explain why they are important in this context. Inflation Exports Investment Marginal propensity Withdrawals Injections Social costs Imports Consumption Oligopoly (In the list there are concepts that are irrelevant and concepts that are useful. Some are arguably more useful than others. Although there are some ‘wrong’ answers there is not just one ‘correct’ one. Our feedback highlights our choice of three concepts but you will find we use others on this list as well. In making your choice try to discard the irrelevant and consider what you think is the most important amongst the others and why.) Feedback and Reflection Copyright: Embedding Threshold Concepts Project 05/09/08 This project is funded by the Higher Education Funding Council for England (HEFCE) and the Department for Employment and Learning (DEL) under the Fund for the Development of Teaching and Learning.