DP Economics
Question 18M.3.HL.TZ0.g.ii
| Date | May 2018 | Marks available | [Maximum mark: 4] | Reference code | 18M.3.HL.TZ0.g.ii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Explain | Question number | g.ii | Adapted from | N/A |
g.ii.
[Maximum mark: 4]
18M.3.HL.TZ0.g.ii
The following data relate to Country Beta (all figures are in $ billions).
Table 3
Country Beta is assumed to be a closed economy with no government sector. Consumption in Beta increases by $0.80 for every $1 increase in national income. In the first quarter of 2019, investment rises by $2 billion.
Country Delta is an open economy with a government sector. Investment rises by $2 billion in both Delta and Beta. Explain how the size of the multiplier and the resulting effect on gross domestic product (GDP) might be different in the two countries.
[4]
Markscheme
