Suppose C = 100 + 0.6(Y - T)and T = 200,I = 140,G = 250 and NX = 50 - 0.2Y.The income-expenditure multiplier is equal to

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The income-expenditure multiplier is calculated as 1/(1 - MPC), where MPC is the marginal propensity to consume. Here, MPC is 0.6, so the multiplier is 1/(1 - 0.6) = 1/0.4 = 2.5. However, considering the open economy with NX = 50 - 0.2Y, the effective multiplier is 1/(1 - MPC + marginal propensity to import), which is 1/(1 - 0.6 + 0.2) = 1/0.6 = 1.67.