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Basic Keynesian Models · CAPE Economics Unit 2

71 past-paper questions on Basic Keynesian Models, part of Models of the Macroeconomy, from every CAPE Economics Unit 2 paper on Quelpr.

Practise Basic Keynesian Models
  1. 3(a)1 mark· CAPE Economics Unit 2 · 2006 · Paper 1Determine the level of autonomous consumption spending.
  2. 3(b)1 mark· CAPE Economics Unit 2 · 2006 · Paper 1Determine the marginal propensity to consume.
  3. 3(c)2 marks· CAPE Economics Unit 2 · 2006 · Paper 1Calculate the multiplier.
  4. 3(d)2 marks· CAPE Economics Unit 2 · 2006 · Paper 1Determine the equilibrium level of income.
  5. 4(a)2 marks· CAPE Economics Unit 2 · 2006 · Paper 1Define the terms 'saving' and 'investment'.
  6. 4(b)2 marks· CAPE Economics Unit 2 · 2006 · Paper 1State the relationship between saving and investment at equilibrium in a closed economy.
  7. 4(c)2 marks· CAPE Economics Unit 2 · 2006 · Paper 1Draw the Keynesian aggregate supply curve.
  8. 5(a)4 marks· CAPE Economics Unit 2 · 2006 · Paper 1Using Keynesian analysis, draw a diagram to illustrate an inflationary gap.
  9. 9(a)3 marks· CAPE Economics Unit 2 · 2006 · Paper 1Explain, briefly, the effect of an increase in government spending (with no change in taxes) on aggregate income in an economy that is in recession.
  10. 3(b)(i)8 marks· CAPE Economics Unit 2 · 2006 · Paper 2Explain how the government can use fiscal policy (taxing and spending) to increase the equilibrium level of output from 900 billion to 1100 billion.
  11. 3(b)(ii)10 marks· CAPE Economics Unit 2 · 2006 · Paper 2Using a 45° line diagram, graph the original situation and the solution identified in (b)(i).
  12. 2(d)5 marks· CAPE Economics Unit 2 · 2007 · Paper 2Explain the relationship between 'saving' and 'investment'.
  13. 2(e)20 marks· CAPE Economics Unit 2 · 2007 · Paper 2Using the standard Keynesian 45° diagram, explain the difference between inflationary and recessionary gaps.
  14. 1(c)(i)3 marks· CAPE Economics Unit 2 · 2008 · Paper 2Identify the type of approach used in the provided diagram.
  15. 1(c)(ii)3 marks· CAPE Economics Unit 2 · 2008 · Paper 2What type of gap exists in the economy shown in the diagram?
  16. 1(c)(iii)2 marks· CAPE Economics Unit 2 · 2008 · Paper 2How wide is the gap?
  17. 1(c)(iv)6 marks· CAPE Economics Unit 2 · 2008 · Paper 2How can the gap be closed?
  18. 1(d)10 marks· CAPE Economics Unit 2 · 2008 · Paper 2Calculate equilibrium aggregate income (Y) given: Consumption = .8Y, Investment = 100, Government spending = 80, Exports = 500, Imports = 180.
  19. 2(a)(i)4 marks· CAPE Economics Unit 2 · 2009 · Paper 2Distinguish between the Marginal Propensity to Consume (MPC) and the Average Propensity to Consume (APC).
  20. 2(a)(ii)4 marks· CAPE Economics Unit 2 · 2009 · Paper 2State how the APC and the MPC are calculated.
  21. 2(b)8 marks· CAPE Economics Unit 2 · 2009 · Paper 2Using the simple Keynesian consumption theory, explain the effect of a rise in income on the MPC and the APC.
  22. 2(c)(i)2 marks· CAPE Economics Unit 2 · 2009 · Paper 2Define the term 'autonomous consumption'.
  23. 2(c)(ii)8 marks· CAPE Economics Unit 2 · 2009 · Paper 2Draw a graph illustrating the concept of autonomous consumption and explain the Keynesian consumption function.
  24. 2(d)(i)8 marks· CAPE Economics Unit 2 · 2009 · Paper 2State FOUR determinants of consumption, other than income.
  25. 2(d)(ii)16 marks· CAPE Economics Unit 2 · 2009 · Paper 2Explain how EACH of the four determinants impacts on consumption.
  26. 1(b)(i)1 mark· CAPE Economics Unit 2 · 2010 · Paper 2Determine the value of autonomous consumption.
  27. 1(b)(ii)1 mark· CAPE Economics Unit 2 · 2010 · Paper 2Determine the value of the marginal propensity to consume.
  28. 1(b)(iii)4 marks· CAPE Economics Unit 2 · 2010 · Paper 2Determine the equilibrium level of real GDP.
  29. 1(b)(iv)3 marks· CAPE Economics Unit 2 · 2010 · Paper 2Determine the value of the multiplier.
  30. 2(a)(i)10 marks· CAPE Economics Unit 2 · 2010 · Paper 2Using the Keynesian 45° graphs, explain the difference between the 'recessionary gap' and the 'inflationary gap'.
  31. 1(c)10 marks· CAPE Economics Unit 2 · 2011 · Paper 2Using a standard 45° Keynesian cross diagram, explain how equilibrium is reached between actual expenditure (AE) and income (Y).
  32. 2(a)(i)2 marks· CAPE Economics Unit 2 · 2011 · Paper 2Define marginal propensity to consume (MPC).
  33. 2(a)(ii)2 marks· CAPE Economics Unit 2 · 2011 · Paper 2Define average propensity to consume (APC).
  34. 2(a)(iii)2 marks· CAPE Economics Unit 2 · 2011 · Paper 2Define autonomous consumption.
  35. 2(b)6 marks· CAPE Economics Unit 2 · 2011 · Paper 2Using a graph, explain the Keynesian consumption function showing how the MPC and APC are affected by an increase in income.
  36. 2(c)(i)3 marks· CAPE Economics Unit 2 · 2011 · Paper 2Calculate the equilibrium level of income.
  37. 2(c)(ii)2 marks· CAPE Economics Unit 2 · 2011 · Paper 2Calculate the multiplier in the economy.
  38. 2(d)8 marks· CAPE Economics Unit 2 · 2011 · Paper 2Identify four major determinants of aggregate consumption and explain how each determinant functions.
  39. 1(d)(i)4 marks· CAPE Economics Unit 2 · 2012 · Paper 2Distinguish between 'marginal propensity to consume' (MPC) and the 'average propensity to consume' (APC) and state how EACH is calculated.
  40. 1(d)(ii)5 marks· CAPE Economics Unit 2 · 2012 · Paper 2Using the simple Keynesian consumption theory, explain the effect of a rise in income on the MPC and APC.
  41. 1(c)(i)a)1 mark· CAPE Economics Unit 2 · 2013 · Paper 2Determine the autonomous consumption.
  42. 1(c)(i)b)1 mark· CAPE Economics Unit 2 · 2013 · Paper 2Determine the marginal propensity to consume.
  43. 1(c)(ii)4 marks· CAPE Economics Unit 2 · 2013 · Paper 2Calculate the equilibrium level of real GDP.
  44. 1(c)(iii)a)2 marks· CAPE Economics Unit 2 · 2013 · Paper 2Calculate the multiplier.
  45. 1(c)(iii)b)2 marks· CAPE Economics Unit 2 · 2013 · Paper 2State whether the multiplier will be smaller or larger than the government spending multiplier. Justify your response.
  46. 2(b)15 marks· CAPE Economics Unit 2 · 2013 · Paper 2Using the Keynesian 45° graph, explain the difference between a 'recessionary gap' and an 'inflationary gap'.
  47. 2(c)(ii)3 marks· CAPE Economics Unit 2 · 2013 · Paper 2Explain how Keynesian economists will respond to a recessionary gap.
  48. 1(d)9 marks· CAPE Economics Unit 2 · 2014 · Paper 2Describe THREE types of 'leakages' from the circular flow of an economy.
  49. 2(b)(i)4 marks· CAPE Economics Unit 2 · 2014 · Paper 2Distinguish between 'savings' and 'consumption'.
  50. 2(b)(ii)3 marks· CAPE Economics Unit 2 · 2014 · Paper 2With the use of an example, explain the term 'marginal propensity to consume'.
  51. 2(c)(i)3 marks· CAPE Economics Unit 2 · 2014 · Paper 2Calculate the equilibrium level of income.
  52. 2(c)(ii)2 marks· CAPE Economics Unit 2 · 2014 · Paper 2State the multiplier of the economy.
  53. 1(b)(v)4 marks· CAPE Economics Unit 2 · 2015 · Paper 2Calculate the output gap (in percentage terms) in 2013 and in 2014, respectively.
  54. 1(b)(vi)2 marks· CAPE Economics Unit 2 · 2015 · Paper 2State whether the output gap was recessionary or inflationary in 2013 and 2014, respectively.
  55. 2(a)(i)1 mark· CAPE Economics Unit 2 · 2015 · Paper 2Identify the most important determinant of consumer spending and personal saving.
  56. 2(a)(ii)a)2 marks· CAPE Economics Unit 2 · 2015 · Paper 2Define marginal propensity to consume (MPC).
  57. 2(a)(ii)b)2 marks· CAPE Economics Unit 2 · 2015 · Paper 2Define marginal propensity to save (MPS).
  58. 2(a)(iii)2 marks· CAPE Economics Unit 2 · 2015 · Paper 2Describe the relationship between MPC and MPS.
  59. 2(b)(i)a)2 marks· CAPE Economics Unit 2 · 2015 · Paper 2Calculate the average propensity to consume (APC).
  60. 2(b)(i)b)3 marks· CAPE Economics Unit 2 · 2015 · Paper 2Calculate the average propensity to save (APS).
  61. 2(b)(ii)4 marks· CAPE Economics Unit 2 · 2015 · Paper 2Calculate the multiplier and interpret its value.
  62. 1(a)(i)2 marks· CAPE Economics Unit 2 · 2016 · Paper 2Define the term 'equilibrium level of output'.
  63. 1(d)8 marks· CAPE Economics Unit 2 · 2016 · Paper 2Discuss TWO ways in which businesses adjust their level of inventory investment if the level of GDP is in disequilibrium.
  64. 2(a)2 marks· CAPE Economics Unit 2 · 2016 · Paper 2Describe the relationship between the marginal propensity to consume (MPC) and marginal propensity to save (MPS).
  65. 2(b)6 marks· CAPE Economics Unit 2 · 2016 · Paper 2Copy and complete Table 2 to show the 'consumption' and the 'average propensity to consume' (APC).
  66. 2(c)(i)8 marks· CAPE Economics Unit 2 · 2016 · Paper 2From your completed Table 2, draw ONE graph to show the consumption schedule and ONE graph to show the saving schedule.
  67. 2(c)(ii)1 mark· CAPE Economics Unit 2 · 2016 · Paper 2Determine the break-even level of income.
  68. 2(d)8 marks· CAPE Economics Unit 2 · 2016 · Paper 2Discuss TWO ways in which the economy adjusts withdrawals if the level of GDP is in disequilibrium.
  69. 1(d)10 marks· CAPE Economics Unit 2 · 2017 · Paper 2Using a standard 45° Keynesian cross diagram, explain how equilibrium is reached between actual expenditure (AE) and income (Y).
  70. 1(b)(ii)3 marks· CAPE Economics Unit 2 · 2021 · Paper 2Using an example, explain the concept 'marginal propensity to consume'.
  71. 1(b)(iii)3 marks· CAPE Economics Unit 2 · 2021 · Paper 2Calculate the equilibrium level of income.

Related topics in Models of the Macroeconomy