Countries with a ________ marginal propensity to import will have ________ government purchase multipliers.
A)higher; higher
B)higher; lower
C)lower; lower
D)positive; negative

Question

Quizplus · Accepted Answer

Countries with a higher marginal propensity to import will have lower government purchase multipliers because a larger portion of any increase in income goes to imports rather than domestic goods and services, reducing the multiplier effect of government spending.

Countries with a ________ Marginal Propensity to Import Will Have