Gce Model Questions Vol1 2020 Economics Question 1
Practice objective / multiple choice question 1 from the 2020 Gce Model Questions Vol1 Economics examination.
The economy's current real GDP is \(2\) trillion dollars and the population is growing at \(2\%\) per year. The government wishes to raise real per‑capita income by \(5\%\) in five years, using only additional investment. The fiscal multiplier for investment is \(2.5\). Assuming the population continues to grow at the same rate and that the multiplier remains constant, what constant additional amount of annual investment (in billions of dollars) must the government undertake each year to meet the target?
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About This Question
This is Gce Model Questions Vol1 2020 Economics Question 1. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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