Quelpr
2 marksBasic Keynesian Models

CAPE Economics Unit 2 · 2016 · Paper 2 · Question 2(a)

Question 2 covers consumption, savings, and macroeconomic equilibrium.

Describe the relationship between the marginal propensity to consume (MPC) and marginal propensity to save (MPS).

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 2(b)Copy and complete Table 2 to show the 'consumption' and the 'average propensity to consume' (APC).[6 marks]
  2. 2(c)(i)From your completed Table 2, draw ONE graph to show the consumption schedule and ONE graph to show the saving schedule.[8 marks]
  3. 2(c)(ii)Determine the break-even level of income.[1 mark]
  4. 2(d)Discuss TWO ways in which the economy adjusts withdrawals if the level of GDP is in disequilibrium.[8 marks]

More practice: the rest of this paper · more Basic Keynesian Models questions · all CAPE Economics Unit 2 past papers