Lesson M1.5.1

M1.5.1 The national income multiplier and propensities Quiz: OCR Economics, Unit 6

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

Lesson M1.5.1, The national income multiplier and propensities: 20 multiple choice questions for the OCR Economics (H460), Unit 6: Aggregate demand and aggregate supply, written with Revision Ninja.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. What abbreviation represents the proportion of additional income spent on domestic goods and services?

    • MPC
    • MPM
    • APC
    • MPS

  2. What abbreviation represents the fraction of additional income that households choose to save?

    • MPT
    • MPC
    • APS
    • MPS

  3. What formula calculates the national income multiplier using the marginal propensity to withdraw?

    • 1 + MPW
    • 1 - MPW
    • 1 / MPW
    • MPW / 1

  4. Which leakages are summed to calculate the total marginal propensity to withdraw?

    • Savings, taxes, imports
    • Imports, exports, taxes
    • Taxes, exports, savings
    • Savings, consumption, imports

  5. What economic theory states that investment levels depend on the rate of change of national income?

    • Accelerator effect
    • Fisher effect
    • Crowding out effect
    • Multiplier effect

  6. What happens to the size of the multiplier when the marginal propensity to consume increases?

    • It becomes zero
    • It decreases
    • It remains constant
    • It increases

  7. What measure is calculated by dividing total consumption expenditure by total national income?

    • MPC
    • MPM
    • APS
    • APC

  8. What term describes an initial drop in spending causing a larger final reduction in national income?

    • Reverse multiplier
    • Fiscal drag
    • Accelerator effect
    • Negative output gap

  9. If the marginal propensity to consume is 0.8, what is the value of the multiplier?

    • 1.25
    • 8
    • 4
    • 5

  10. If the marginal propensity to withdraw is 0.25, what is the value of the multiplier?

    • 2.5
    • 4
    • 5
    • 0.25

  11. Government spending rises by £10 billion, causing national income to increase by £40 billion. What is the multiplier?

    • 4
    • 10
    • 0.25
    • 30

  12. If MPS is 0.1, MPT is 0.1 and MPM is 0.05, what is the marginal propensity to withdraw?

    • 0.75
    • 0.25
    • 0.15
    • 0.20

  13. In a closed economy with no government, if the MPC is 0.75, what is the MPS?

    • 0.75
    • 0.25
    • 4.00
    • 1.33

  14. An injection of £50 million into an economy with a multiplier of 3 increases national income by how much?

    • £50 million
    • £150 million
    • £100 million
    • £450 million

  15. If total consumption is £800 billion and national income is £1,000 billion, what is the APC?

    • 1.25
    • 0.2
    • 0.8
    • 8.0

  16. Which component of aggregate demand fluctuates most directly as a result of the accelerator principle?

    • Net exports
    • Investment
    • Consumption
    • Government spending

  17. If the marginal propensity to save rises, what happens to the size of the multiplier?

    • It decreases
    • It becomes infinite
    • It increases
    • It stays unchanged

  18. If the marginal propensity to withdraw is 0.4, what initial injection increases national income by £100 million?

    • £60 million
    • £25 million
    • £40 million
    • £250 million

  19. Which change will reduce the numerical value of the national income multiplier in an open economy?

    • Increase in MPC
    • Increase in MPT
    • Decrease in MPM
    • Decrease in MPS

  20. According to the accelerator principle, capital investment changes in response to changes in what variable?

    • Nominal exchange rate
    • General price level
    • Rate of GDP growth
    • Absolute interest rates

All OCR Economics quizzes