AP Multipliers

Multiple Choice

Which model represents the constant ripple (OR FLOW) of money throughout the economy

• Circular Flow

• PPC

• Business Cycle

• Supply & Demand

Multiple Choice

1. The Gov’t increases spending by $1 million. Expenditure Multiplier is 10. Aggregate Demand increases by...

• $1O million

• $1 million

• $11 million

Dropdown

The Gov’t decreases spending by $10 million. The Expenditure Multiplier is 5. Gross Domestic Product


​

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by​

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Multiple Choice

1. Stan gets $500 and spends $100. His MPC is _______________ and his MPS is _______________. (divide the amount spent by the original amount)

• MPC= 20%, MPS= 80%

• MPC= .80, MPS= .20

• MPC= 10%, MPS= 50%

• MPC= .50, MPS= .10

Multiple Choice

1. Zack gets $1,000 and saves $300. His MPC is _______________ and his MPS is _______________.

• MPC= 70%, MPS= 30%

• MPC= .30, MPS= .70

• MPC= 10%, MPS= 30%

• MPC= .20, MPS= .80

Multiple Choice

1. Dylan gets $20M and spends $5M. His MPC is _______________ and his MPS is _______________.

• MPC= .30, MPS= .70

• MPC= 75%, MPS= 25%

• MPC= .25, MPS= .75

• MPC= 20%, MPS= 5%

Dropdown

In Ecotopia, if a citizen is given $10, they would spend $9 on average. In 1991, the Ecotopian Government decreased military spending by $1 million. In 1996, they cut taxes by a total of $1 million.
Ecotopia's average MPC is​

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Ecotopia's average MPS is ​

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The Expenditure (SPENDING) multiplier is​

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The Tax multiplier is ​

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Dropdown

In Ecotopia, if a citizen is given $10, they would spend $9 on average. In 1991, the Ecotopian Government decreased military spending by $1 million. In 1996, they cut taxes by a total of $1 million.
Last question you should have answered 10 for spending multiplier and 9 for tax multiplier



When the government decreased military spending in 1991, GDP ​

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by ​

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When the government cut taxes in 1996, AD​

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by ​

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​Practice multipliers using the the activity on Schoology
Due Monday