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
2
750.0
110
3
820.0
125
4
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)
Change in
equilibrium
national income
($m)
400
?
?
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 statement is
economy?
correct for this
(A) There is a budget deficit.
(B) The economy is in equilibrium.
(C) There is a current account deficit.
(D) Withdrawals are greater than 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 nation’s 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
2
3
(A) It was highest in Year 1.
(B) It was lowest in Year 3.
Marginal Propensity to Consume (MPC)
0.2
0.3
0.6
(C) It increased between Years 1 and 3.
(D) It doubled between Years 2 and 3.