Q7: Work out the income multiplier value of an open economy, where the marginal propensity to consume is 0.7 and the marginal propensity to tax is 0.1 and the marginal propensity to import is 0.2.

A)2B)1.67C) 1.1D)0.5

Q8: If the economy is a closed economy (without a government sector, what is the change in GDP inflows, if there is an investment injection of $400m, where the marginal propensity to consume throughout the society is 0.6?

A)$67mB) $ 1000mC) $1600mD) $2400m