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If a Country's Imports Are Very Important in Determining the Volume

Question 82

Multiple Choice

If a country's imports are very important in determining the volume of exports from its trading partners, then:


A) the simple spending multiplier understates the true value of the multiplier.
B) the spending multiplier will equal 1/marginal propensity to import.
C) the simple spending multiplier is an accurate measure of the multiplier effect.
D) the simple spending multiplier will equal 1/MPC
E) the spending multiplier will equal 1/marginal propensity to save.

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