Scenario Threshold Network Exercise: the changing value of the multiplier 1

Threshold Network Exercise: the changing value of the multiplier
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.
Marginal propensity
Social costs
(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
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.