The oversimplified formula for the multiplier yields a number that is too large due to the exclusion of
A)variable imports.
B)changes in the price-level.
C)income taxes.
D)All of the above.

Question

Quizplus · Accepted Answer

The oversimplified multiplier formula often assumes a closed economy with no taxes or imports and constant prices, leading to an overestimation of the multiplier effect.

The Oversimplified Formula for the Multiplier Yields a Number That