The open-economy government spending multiplier is smaller than the closed economy government spending multiplier.

Name: The open-economy government spending multiplier is smaller than the closed economy government spending multiplier.
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In an open economy, some of the government spending leaks out through imports, reducing the overall impact on the economy. Therefore, the multiplier effect is smaller in an open economy compared to a closed economy where there are no leakages through imports.

The Open-Economy Government Spending Multiplier Is Smaller Than the Closed