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If the Marginal Propensity to Import (M)is Greater Than Zero,the

Question 189

Multiple Choice

If the marginal propensity to import (m) is greater than zero,the income-expenditure multiplier is smaller than when m is equal to zero because


A) as income increases,some of the additional consumption expenditure will be on imported goods.
B) as income increases,less consumption expenditure will be on imported goods.
C) as income decreases,there will be additional consumption expenditure on imported goods.
D) as income increases,there will be a decrease in consumption expenditure.
E) as income increases,there will be an increase in the amount of taxes paid.

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