What students need to learn:
Content

Students should be able to:

Additional Guidance Notes

Equilibrium level of output

Understand the concept of equilibrium real national output.

The ability to apply the AD/AS model to realworld situations will be
expected.

The multiplier

Explain the size of the multiplier, using the concept of the marginal
propensity to consume; apply the multiplier to shifts in AD.

Students should be able to explain the impact on the economy of the
multiplier.
Evaluation points include the difficulty of measuring it; the time it
takes to come into full effect and size of leakages.
Calculations using the multiplier formula will not be required.
