If the MPC = 0.9 and the MPM = 0.1, then the spending multiplier with variable net exports equals 8.

Name: If the MPC = 0.9 and the MPM = 0.1, then the spending multiplier with variable net exports equals 8.
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Quizplus · Accepted Answer

The spending multiplier with variable net exports is given by the formula: 1/(1-MPC+MPM). Plugging in the values, we get 1/(1-0.9+0.1) = 1/0.2 = 5. Therefore, the statement is false.