
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:
Verified
Q55: The U.S.dollar appreciates against the euro.What is
Q56: Stock market wealth decreases.What is the impact
Q57: Decreases in autonomous spending have a contractionary
Q58: Increase in the real interest rate will
Q59: The marginal propensity to consume is 0.75,marginal
Q61: The role of the costs of capital
Q62: Temporary tax cuts will have a greater
Q63: In a open economy,aggregate expenditures are the
Q64: Potential GDP measures the capacity of the
Q65: The real interest rate,business taxes,expected profits and
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents