Gce Model Questions Vol1 2018 Economics Question 39
Practice objective / multiple choice question 39 from the 2018 Gce Model Questions Vol1 Economics examination.
In Country B the current GNI per capita is $4 000 and the poverty line is set at $2 000. Thirty percent of the population lives below the poverty line. Private investment equals 20 % of GNI and the marginal propensity to consume (MPC) is 0.8. A development programme raises private investment by 15 % of its current level. Assuming a simple Keynesian multiplier \(k = 1/(1-MPC)\) and that the poverty rate falls proportionally to the percentage increase in GNI per capita, calculate the new poverty rate (as a percentage) after the multiplier effect has taken place.
Answer Options
About This Question
This is Gce Model Questions Vol1 2018 Economics Question 39. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
Master the Exam!
You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.