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The Open Economy Multiplier Is Calculated as Follows

Question 60

Multiple Choice
The open economy multiplier is calculated as follows:

The open economy multiplier is calculated as follows:


A) 1/[1-(marginal propensity to consume + marginal propensity to invest) ]
B) 1/[1-(marginal propensity to consume + marginal propensity to import) ]
C) 1/[1-(marginal propensity to consume + marginal propensity to invest + marginal propensity to import) ]
D) 1/[1-(marginal propensity to consume + marginal propensity to invest - marginal propensity to import) ]

Correct Answer:

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