QUIZ 1 :MULTIPLIER AND MARGINAL PROPENSITIES ( Show your solution for numbers that

require computation)

GDP = DIC

1100

100160

200220

300280

400340

500400

600460

QUESTIONS TO ANSWER:

1.If DI were 400, how much would be saved?

2.What is the "break-even" level of disposable income?

3.What is the economy's MPC?

4.What is the economy's MPS?

5.Based from your computed MPC, what is the Multiplier?

6.Based from your computed MPS, what is the Multiplier?

7.How much is the ultimate increase in GDP, if the initial increase in investment is 90, whose MPC is ?

8.If the MPC is .7 what is the multiplier?

9.If the MPS is 3, what is the multiplier?

10.What is the quickest way to determine the multiplier?