2 marksBasic Keynesian Models
CAPE Economics Unit 2 · 2011 · Paper 2 · Question 2(a)(ii)
Define average propensity to consume (APC).
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- 2(a)(i)Define marginal propensity to consume (MPC).[2 marks]
- 2(a)(iii)Define autonomous consumption.[2 marks]
- 2(b)Using a graph, explain the Keynesian consumption function showing how the MPC and APC are affected by an increase in income.[6 marks]
- 2(c)(i)Calculate the equilibrium level of income.[3 marks]
- 2(c)(ii)Calculate the multiplier in the economy.[2 marks]
- 2(d)Identify four major determinants of aggregate consumption and explain how each determinant functions.[8 marks]
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