Multiple Choice
Imports
A) increase the size of the multiplier because imports make disposable income less than real GDP.
B) decrease the size of the multiplier because spending on imports does not increase real GDP in the domestic nation.
C) increase the size of the multiplier because imports are paid for by exports.
D) decrease the size of the multiplier because imports lead to an increase in taxes and government purchases.
Correct Answer:
Verified
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