The addition of imports reduces the value of the multiplier.

Name: The addition of imports reduces the value of the multiplier.
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Question

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When a country imports goods, it means that the money spent on those imports is leaving the economy, which decreases the total amount of money circulating within the economy. As a result, this reduces the multiplier effect of any initial spending in the economy, thereby reducing the overall impact of any fiscal or monetary policies.

The Addition of Imports Reduces the Value of the Multiplier