4 marksBasic Keynesian Models
CAPE Economics Unit 2 · 2014 · Paper 2 · Question 2(b)(i)
Distinguish between 'savings' and 'consumption'.
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- 2(a)(i)Define the macroeconomic variable 'Investment'.[2 marks]
- 2(a)(ii)Define the macroeconomic variable 'Interest rate'.[2 marks]
- 2(b)(ii)With the use of an example, explain the term 'marginal propensity to consume'.[3 marks]
- 2(c)(i)Calculate the equilibrium level of income.[3 marks]
- 2(c)(ii)State the multiplier of the economy.[2 marks]
- 2(d)(i)Explain Durability as a determinant of the variability of investment.[3 marks]
- 2(d)(ii)Explain The accelerator as a determinant of the variability of investment.[3 marks]
- 2(d)(iii)Explain Irregularity of innovation as a determinant of the variability of investment.[3 marks]
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